Exporters question bond issue promise of lower rates

The exporters chamber has questioned the main selling point that the central government cites to support the issuance of some $4 billion in bonds.

The government has said repeatedly that the bond issues will benefit Costa Ricans by lowering interest rates. But the chamber, the Camara de Exportadores de Costa Rica, cites a statement by Rodrigo Bolaños, president of the Banco Central, who was not as certain.

Bolaños said, in a statement cited by the chamber, that he could not discount the possibility of a decline in interest rates, but he does not think the effect will be very big. At least rates will not increase, he said.

The central government hopes to float $1 billion a year for the next four years. Unclear is how the debt will be repaid. Some of the money will go to refinancing existing foreign debt at a lower interest rate, officials have said.
The exporters chamber is worried that an inflow of so many dollars will reduce the value of the dollar against the colon, the exchange rate.

Exporters, of course, receive most of their income in foreign currency.

The bond issue already has been passed by the Asamblea Legislativa. Another vote is needed.

Luis E. Loría, director general of the chamber, said that the legislature should reject the bond proposal and that the government should get its house in order by eliminating 100 percent of the unnecessary public expenses and improve the quality and efficiency of spending.

He also called for a profound reform of the state to eliminate duplicate agencies and those agencies that have lost their reason for being.

He also said that reform was needed in public employment and pensions.

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