Over the next nine months the Central Bank of Costa Rica will slow credit growth to the private sector, keeping it at below 9%.

Posted under a publication of the Macroeconomic Program for 2013-2014 the measure is temporary and intends to prevent the formation of a credit bubble caused by excess liquidity. During 2012 private sector credit grew by 14.2%.

The Costa Rican Banking Association (ABC by its initials in Spanish), an organization which affiliates all the commercial banks operating in the country, opposed the measure, saying it will directly affect bank customers, and limit access to loans for housing and small entrepreneurs.

The ABC believes that the measure does not address the source of the underlying problems, which is mainly related to the Central Government’s fiscal deficit.

Source: Central Bank of Costa Rica (PDF)