High interest rates, the product of the Treasury’s steady increase in financing with debt, is leading banks to seek funds abroad.

In the country the average lending rate in dollars is about 11%, considerably higher than in the United States, where the average is 4%.

This gap is the result of higher government borrowing in dollars, which has increased its debt in this currency by 165% year on year.

“This significant demand for dollars has dried up sources from national financial institutions and, consequently, the market is stretched, prompting banks to attract dollars abroad, an trend that has grown strongly this year,” says elfinancierocr.com.

On average, bank financing abroad increased by 60% between 2011 and August 2012. Some banks like Citibank and the BCR reported increases of 308% and 130%, respectively.

Source: ElFinancieroCR.com