Saturday, June 27th, 2015 | USD: Buy 528.81 / Sell 541.11
February 18th, 2014 (InsideCostaRica.com) The Central Bank of Costa Rica (BCCR) announced yesterday in a press release that it would seek to intervene in any “violent” fluctuations in the exchange rate on the Monex wholesale market.
The Bank said, however that it does not intend to alter the trend of the dollar exchange rate, nor would it eliminate completely the recent volatility in the exchange rate.
The Bank said that as part of its intervention plan, it would define “strictly technical” criteria for when it would perform interventions in the market.
However, BCCR said that it would not publicly release all details of such criteria, in order to “protect the population against the nature of the Costa Rican exchange market, where some participants such as the BCCR have ‘strong market power’.”
“That information (criteria for interventions) could provide opportunities for speculating against the country’s foreign reserves and harm other smaller participants in the market, ensuring unjustified profiteering,” the Bank said.
Some economists have criticized the bank for not making the criteria public.
The Central Bank intervenes in the market by selling dollars into the wholesale market to bring its price down, and by purchasing dollars to bring its price up, in an effort to maintain relatively stable levels of exchange.
“Violent variations in the exchange rate leads to sharp movements in prices, costs, and income, increasing the degree of uncertainty about these and other variables, which is detrimental to the welcome of Costa Rican society,” the Bank said.
The Central Bank “reference rate” stood at ¢517.52 (buy) and ¢531.62 (sell) this morning.