The President of Costa Rica Laura Chinchilla criticized state-owned commercial banks for being directly responsible for the high interest rates plaguing the economy.

Nacion.com reports that “President Laura Chinchilla recently said that Costa Rican public banks “are over stepping their hand” with interest rates in colones which are hitting Costa Rican’s wallets.”

Chinchilla said “it is the public banks themselves who are paying more interest on deposits of money”, and there have been reports of “offers up to 12% of interest”, a figure way above the offer from private banks.

Analysts have pointed to the main cause of the rise in interest rates in recent months as being the demand for capital within the Ministry of Finance, which needs to cover Costa Rica’s rising cash deficit.

According to Nacion.com, Chinchilla declared: “I remind those in charge of (public), state banks that although state banks have taken a significant step towards opening up the market, to being a competitive market, and we understand that public banks certainly have to operate with profit generation criteria, and they can not ignore commercial criteria, they are overstepping the mark”.

Source: Nacion.com