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Dollar continued gains despite Central Bank intervention

dollars

March 10th, 2014 (InsideCostaRica.com) The US dollar gained an additional ¢10.77 last week despite significant intervention by Costa Rica’s Central Bank in the Monex wholesale market.

 

The Central Bank sold a total of $140.9 million into the market last week in a series of attempts to control the high-flying greenback.

 

Central Bank president, Rodrigo Bolaños attempted to calm the business sector during a mid-week press conference, saying that the “exchange rate would stabilize over time.”

 

Economists are blaming an increased demand for dollars by the private sector, amongst other factors for the dollar’s continued gains that began early this year.

 

The Central Bank reference rate stands at 555.79 (buy) and 570.79 (sell).

 

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  • Karen Mata

    CR is quickly going the way of Venezuela, Argentina and Puerto Rico. Social democracy doesn’t work unless you have the luxury or printing the world’s reserve currency and time is running out there too.

    • expatin paradise

      Social democracy works just fine, as long as government doesn’t spend more than it receives – look at the countries with the best standards of living. Costa Rica has been spending borrowed money, which is not sustainable, because the rich and powerful have blocked attempts to increase tax revenues. Costa Rica needs to increase its revenues through higher taxes (and enforcement) on those who can afford to pay.

      Costa Rica also needs to streamline governmental procedures. The management of the CCSS and other governmental agencies has
      been terribly inefficient, burdensome not only to their employees but
      also to their customers. Keeping people in hospital beds needed by others while waiting a month for hospital tests that should be performed on an outpatient basis should be criminal. Getting a different set of procedures and different interpretation of “la ley de Costa Rica” by each employee in a government office is equally absurd. Public employees should receive pay adjustments along with clear operating procedures and performance standards.

      • Karen Mata

        Could you please list some of these exemplar social democracies?

        Western Europe provided a SD model, and of course is now a basket case looking for a bail out, or rather a Cypress style bail in…coming soon to a theater near you I may add.

        The only way to save yourself from this quadrillion dollar derivative bonfire of the western SD nations is GOTS. Get Out of The System.

        • El Torito

          Sweden, Denmark, and Canada come to mind, just to name a few.

          • Karen Mata

            NYT “Denmark’s massive welfare state imposes the highest marginal income tax rates in the world to subsidize able-bodied Danes. The nation faces massive unemployment.”

            Globe and Mail “Canada has a huge current account deficit which vies for the worst in the developed world.”

            Refer to Ekonomifakta for Sweden’s structural problems which mirror the others.

          • PublicEnemy2u

            Denmark has long held the title of the best place on earth to be laid off. With an expensive, generous welfare state, and the world’s most lavish unemployment insurance scheme, virtually no one falls through the cracks upon losing a job.
            But the government unveiled an unpleasant surprise in June, when it halved the country’s whopping four-year unemployment benefits period to help mend its finances after the financial crisis.

          • Lav

            You are basing Canada on news from 2 years ago… When the Canadian dollar was sitting higher than the American dollar. Now that the CAD is below the USD, the said deficit will turn into a surplus. Canada was selling its goods and receiving a lower value on the world in return… It doesn’t really take an economist to figure out what happens there.

            Maybe you want to “try again honey”. Can we try maturity instead of childish banter?

          • Karen Mata

            Globe and Mail December 31, 2013
            “Canada’s current account deficit is 3.3% of GDP, vies for worst in developed world.”

            Sorry, but try again honey.

          • Lav

            You realize the CAD just dropped below the USD… But good catch. The CAD was above the USD for a very long time, hence the reason for a deficit. It’s not a fair comparison when the reserve currency (the US economy) completely tanked. It’s easy to quote an example for an argument, but you never addressed the reason. The reason for the deficit is not because of a more socialist country…

            Again with the childish banter… Maybe leave the discussion to the adults?

          • Karen Mata

            Your rebuttal point has now shifted. I stand behind mine.

          • Lav

            Ummm no it hasn’t. Both my rebuttal points refer to currency, I stood corrected on the date. An account deficit has nothing to do with a socialist platform. The fact it was so bad has more to do with the currency exchange rate than anything else. Now that the CAD is below the USD, you can watch that number decrease.

            The fact you even brought that article into a discussion on socialism shows you either a) never bothered to even read it or b) have no idea which way is north.

            Canadians pay higher taxes; they have better access to healthcare, their public education is ranked in the top 10, enjoy a better quality of life, and against all odds still have a booming real estate market. I would say what they are doing works.

          • Lav

            http://www.huffingtonpost.ca/2014/04/03/trade-surplus-february_n_5083295.html?utm_hp_ref=canada-business

            Yep, like I was saying… nothing like a shift in the currency to change numbers,

      • mhogan

        Socialism, or Social Democraciy if you prefer, has a record of failure so blatant that only an intellectual can ignore it. If you are looking for anecdotal proof that social democracies work somewhere in time and place, just give that place time and it’ll prove you wrong. History is funny that way. Only in Costa Rica are they sufficiently arrogant to believe they can boldly do what no country has done before and not suffer the same outcome. CR, like many nations, is facing a declining demographic population — there’ll be more old people and less workers to support that utopian social democracy that you say works just fine. Couple that with policies and anti-foreigner attitudes and I beg to have an explanation of where all this money is going to come from. Maybe we can export our green-ness.

  • P mattingly

    A tiny country like CR cannot borrow 1/2 of what it spends each year without the consequences which the public is seeing today. Inflation is also the politically unspoken result of this also which is also taken place. All CR needs now is another socialist bent president to make the economic situation worse. It is interesting how a Latin national currency has a tendency to blow apart at the end of a badly managed presidential term so the new guy doesn’t get the blame.

  • disgusted

    Over burden Costarrisences have in paying their Government employees with great benefits and jobs they can never or ever get fired from.

    Presidents/Diputados getting a lifetime pension after serving only 4 yrs. There one diputado she in her late 20′s early 30′s got the job and votes from old family connection by the PLN and voted in. lady Laura thought nothing of it giving them all Vehicles worth 75k , endless gas cards, trips, Lunches and a paid staff all on the people colon . Now she will get a lifetime pension soon .

    Many think we will also go the way Chile when the international bank stepped in. Bankruptcy is not far off , it is coming. no matter how many tourist they can attract. I don’t want to sound like Chicken little the sky is falling however something has to give. I agree with Karen Mata and P Mattingly