American Expatriate Costa Rica

Exchange rate rises and will continue to rise

After the abrupt change in the exchange rate of the dollar at the end of May, when it reached historical highs, the price of foreign currency has kept increasing at a constant rate.

This occurs at a time when foreign currency bank liquidity remains high, exceeding ¢2.1 billion.

This year, in general, the market has seen a lower supply of foreign exchange and at some point an abnormal demand for dollars which pushed the price up. When this abnormal behavior disappeared, the exchange rate continued with an upward trend dictated by the fundamentals of the economy and under the supervision of the Central Bank,”

said Luis Diego Herrera, an economic analyst at Acobo.

In the last month, in addition, interventions in the Foreign Currency market of the Central Bank (Monex) were stopped to stabilize the exchange market.

Herrera believes the Central Bank has notices it is not so necessary to intervene so frequently compared to previous dates, although it would do so in case of “violent” variations.

Hairo Rodríguez, from the Cathay bank, believes that there is a Central Bank strategy to let the exchange rate increase gradually.

After the May remittance, the exchange rate stabilized and has been rising at an analyzed rate of 8%, a significant figure compared to the periods of stability we have had in the past,”

said Rodríguez.

Analysts estimate that the depreciation of the colon at the end of the year could be between 4% and 5%, around ¢600 per dollar.

crhoy.com