Central Bank will intervene to avoid “violent” fluctuations in exchange rate

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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.

 

 

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    • PublicEnemy2u

      every American tourist realizes that their vacation costs are higher because of this currency fraud … get you going in,
      get you getting out (exit tax)(currency buy back rate)

    • Yeims

      I get nervous especially when the government begins thinking about “protecting” me.

      • mhogan

        the premise of central planning (including currency manipulation) is that a handful of wunderkinds with your best interest at heart (yeah, right) know better than you what’s good for you. The failure of such a premise and the misery it causes have been clear from the dawn of humanity. Kings and congressmen, dictators and dear leaders, potentates, and presidents all can fall prey to the same imperial impulses: “we know what is good for the people.” And they are always wrong. Give me a libertarian any day — they quietly plot to take over the world and leave you and I alone.

    • dr meno

      OK WAIT a MINUTE. WHO IS the Central Bank. Is it a Costa Rican Bank, or is this the central bank owned by the elite europeans. If it is the former, we need to climate that bank before they repossess all of Costa Rica and take it over. Th central banks around the world is the main economic reason of the crisis we now face around the world. Laura sold the country to them. Most people do not even realize this.

      • roberto

        The Central BAnk are the folks who are pulling Laura’s strings……and Johnny’s.

        • dr meno

          Exactly. I am glad you realize that. The same in the USA and EU. And for the most part the world. I said they are the ones causing all of our worldly problems and wars. These elitist are the ones that need to be subjected to eugenics before they do us in. Fiscally and Physically.

    • Derryl Hermanutz

      The central banks serve their clients, the commerical banks. Who did the Fed and ECB and the governments bail out, the economy or the bankrupt big banks? It’s good old fashioned mercantilsm, big corporations and big government fusing together to become the corporate state. Each Wall St bank controls more money than all Central American nations combined, including the government and private sector of each nation. Exxon Mobil’s annual revenues are equal to the annual GDP of Venezula, a nation of 19 million people. The CEO and Board of Directors of these nation-size corporations exercise absolute dictatorship over the industrial economy that they operate as their corporate property. This is “liberty”?

      CR’s central bank actually does a pretty good job defending the colon against manipulation by concentrated corporate power, and especially against huge pools of speculative money that can inflate and devalue small currencies like the colon and extract profit in both directions. That profit comes out of our pockets.

    • roberto

      Araya enlists former Banco Central
      presidents as supporters

    • Yeims

      And all this coming right out of the blue, and at about the same time international bankers have begun committing suicide — we’re up to seven now. I wonder if there is a connection?