The ratings on the Republic of Costa Rica are supported by: Long-standing political stability, with relatively strong institutions and more of a general respect for the rule of law than found in peer credits; and A highly diversified economy, with a per capita GDP of US$4,379, which is almost twice that of the 'BB' median. The ratings are constrained by: A large, unsupervised offshore banking sector and a high level of dollar lending; Monetary policy that is constrained by quasi-fiscal losses at the central bank, a crawling peg exchange-rate regime, and a high level of dollarization, and Poor external liquidity. The ratings on Costa Rica reflect improved fiscal management over the last year and the likely passage of fiscal reform
