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Daily Mini Devaluations To End
in Fourth Quarter
The Banco Central de Costa Rica
(BCCR) announced Friday that
beginning with the last quarter
for this year it will abandon
the "mini" devaluations that has
been a fixture for the last 22
years. In its place, the BCCR
says it will adopt a "flexible
exchange plan".
The exchange rate of the Costa
Rican colon to the United States
dollar will no longer be a
political variable of the
Central Bank, but, rather will
be fixed by the market.
Francisco de Paula Gutiérrez,
president of the BCCR said the
move will help fight inflation.
Gutiérrez, in a press
conference, said that the daily
mini-devaluations will disappear
and the new exchange plan will
operate with ranges in lows and
highs which will fluctuate the
exchange rate.
The bank president said that the
policy change will translate to
more economic stability and less
inflationary pressure.
According to the monetary plan,
inflation will close 2006 at 11%
and 2007 at 10%.
"We are moving towards a good
path, all depending on what
happens to the price of crude
oil", said Gutiérrez.
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