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Costa Rica Goes on Sale, Offers Bonds to Finance Government Spending

Article Summary:

Costa Rica is set to sell bonds through the international market at the sum of U.S. $ 2 billion to finance its spending.

Photo Credit: Estrategia y Negocios

Original Article Text From Estrategia y Negocios via Google Translate :

Rican Government Will Be Financed Through Bonds

The Economic Affairs Committee approved the bill allows the government to sell abroad up to U.S. $ 2,000 million in bonds to cover its expenses.

Of the plan deserves support in plenary, the government could reduce the sale of bonds within the country, which would reduce the current pressure on interest rates in colones, which strikes many families in debt. Indeed, the Central Bank announced a further increase in interest rates by 0.25 points for maturities ranging from two months to three years.

The Finance Minister Fernando Herrero, thanked the deputies approved the text, which considered complementary to other initiatives, including the Solidarity Tax Project, which raises the tax burden.

The Member of the Libertarian Movement Party, Patricia Perez, said that the text adopted handled three objections she had.

A remark raised by Perez was the maturity of the bonds, which originally was 1 to 30 years. This was varied from 5 to 30 years.

The other was to give foreign currency, not national, and finally, that the funds raised were for the central government (including ministries) and not decentralized.

Smith explained that the changes are not significant because the country has never issued bonds abroad one year, or colons.

Regarding the elimination of the possibility that the Government address decentralized debt, Smith said the subcommittee felt that it could be a risk if they did not pay. Therefore, he added, this action “should be in an institutional framework to ensure that all parties comply.”

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From Estrategia y Negocios

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