December 4th, 2013 (InsideCostaRica.cm) Costa Rica’s Central Bank has stepped up its intervention in the Monex wholesale currency market, purchasing $45.9 million in three days between November 28th and December 2nd.
The most substantial intervention occurred on Monday when the Central Bank purchased $29.1 million, which represented more than half of dollar transactions during that session.
The pace of trading had slowed yesterday, with the average price of the dollar coming in at ¢500.24.
Costa Rica’s exchange rate “band” system sets both a “floor” or lower band and a “ceiling” or upper band for the exchange rate of its national currency against the dollar.
When the value of the dollar vs. the colon reaches the bottom of the band, the Central Bank intervenes by purchasing dollars in the wholesale market.