Central Bank Intervenes
To Put Brakes On Runaway
Exchange Rate
Following Tuesday's US
dollar climb of ¢17
colones, the largest
single jump in one day
since the introduction
of the "bandas cambiaras"
(band) system, the
currency continued the
same trend Wednesday.
The financial
institution with the
highest sell rate was
the BCT, posting an
exchange rate of ¢560
colones per US dollar,
while the Banco Cathay
had the highest buy rate
of ¢547.
The state banks - Banco
de Costa Rica (BCR) and
Banco Nacional (BN) -
both held their rates
equal, setting the buy
at ¢546 and sell at ¢556
at 10:29am and 10:37am.
Both banks refrained
from moving the exchange
in the afternoon has had
been the custom since
Monday.
One co-operative, the
Cooperativa COOCIQUE R.L
offered the buy at ¢561
and the exchange house,
Casa de Cambio Teledolar
S. A., held the buy firm
at ¢562 since 8:49am.
All banks and financial
institutions are report,
within minutes of any
change, their rates to
the Central Bank which
then posts it on its
website.
Click here for the
BCCR website.
Some experts believe
that the exchange rate
will remain constant at
the level for the coming
days, while others
believe the upwards
trend to continue and
may hit ¢570 colones to
one US dollar before
levelling out.
The Central Bank after
keeping on the sidelines
and promises not
intervene, did just that
last night, setting the
band high at ¢555.37 and
low ¢500, changing from
a previous high of
¢572.55 and low of
¢488.27. The ceiling
limit will be increased
¢0.06 colones per day.
In a statement the
Central Bank said it
acted to moderate the
abrupt changes in the
exchange rate.
Costa Rica has been
using the exchange band
system since October
2006 and daily publishes
a "reference rate".
However, according to
the BCCR president,
Francisco de Paula
Gutiérrez, financial
institutions can set
their rates higher and
lower of the reference
rate, which is primarily
used by wholesalers and
banks can buy and sell
at rates higher than
that set by the Central
Bank.
Some recommendations by
experts include not to
take out loans in
dollars if earnings are
in colones; beware of
the risks involved in
taking out loans in
dollars; and to save in
dollars. |
