March 21st, 2013 (InsideCostaRica.com) Costa Rica’s Central Bank has already purchased more than $185 million in the Monex wholesale market to defend the floor of the dollar exchange rate so far in March.
The figure is more than ten times greater than the $13 million that the Monetary Authority had to spend in interventions defending the 500-colon “bottom band” of the exchange rate in February.
In January, the Central Bank was forced to purchase $243 million, and faced a particularly difficult day on January 9th, when it was forced to purchase $77 million in a single session.
The Central Bank has purchased $441 million so far in 2013.
Since March 6th, the Central Bank has had to intervene on a daily basis in the Monex market.
Yesterday, the dollar averaged 500.01 on the market.
The pace of intervention by the Central Bank alarmed both the Bank itself as well as the government of President Laura Chinchilla. As a result, a bill was presented that attempts to limit capital inflows into the local economy.
The bill is on the agenda of the Legislative Assembly but has not yet gone to debate.