BCCR Decision Causes Dollar to Rise

Markets closed with the dollar at ¢518.34, ¢7.88 higher than the day before, after the Costa Rican Central Bank's (BCCR) decision to increase foreign exchange reserves.

Friday, September 3, 2010

Since the BCCR announced the news, the dollar's price increased steadily, reaching a high of ¢523,01 before finally closing at ¢518.34.

Rodrigo Bolaños, president of BCCR, said that, "in the coming days it will be interesting to see what direction the exchange rate takes because just the announcement alone has caused it move up by several colones," reports Nacion.com.

More on this topic

BCCR Could Intervene More in Currency Market

June 2010

The new head of the Central Bank of Costa Rica (BCCR), announced he is pondering the possibility of intervening between the currency bands.

Rodrigo Bolaños, new head of the BCCR, explained that the measure will seek to eliminate abrupt variations in the currency exchange rate.

The Effects of the Exchange Rate Flexibility

January 2013

The latest announcements in Costa Rica about greater exchange rate flexibility to appreciate the colon are worrying exporters.

An article on Crhoy.com reported that "Late last year, the president of Costa Rica’s Central Bank (BCCR) Rodrigo Bolaños announced that the monetary authority will continue the transition announced in 2006 seeking to lead the country towards greater exchange rate flexibility consistent with the full adoption of inflation targeting."

Time for Dollarization in Costa Rica?

March 2014

The volatility that the dollar has shown brings back to table the discussion on whether or not to dollarize the Costa Rican economy.

In his opinion piece in Elfinancierocr.com, Juan Carlos Hidalgo details the implications of the recent behavior of the exchange rate for the economy and suggests dollarization as a way of solving many of the problems that could soon occur if the dollar continues to rise.

Costa Rica: Proposal to Tax Remittances Sent Abroad

January 2013

Representatives of business associations have proposed ten measures to prevent the entry of speculative capital into the country and to provide flexibility to the exchange rate without local currency appreciating.

Elfinancierocr.com reports that "Business representatives this afternoon delivered a plan with 10 steps to curb the heavy influx of foreign capital", among which was "a tax on speculative capital inflows, in addition to promoting a specific tax on remittances sent abroad, of 5% for national banks and 5% for ‘suitcase’ banks".

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