Central Bank of Costa Rica sells $24.5 million to defend exchange rate bands

The fourth consecutive week, the Central Bank intervened in the exchange market selling foreign exchange to prevent the exchange rate from going above the preestablished ceiling.

Tuesday, August 12, 2008

Since the last modification to the exchange rate bands regime, the monetary authorities have been forced to intervene in the wholesale money market (Monex) in order to prevent the exchange rate from surpassing the upper limit set by the bank.

More on this topic

Costa Rica Central Bank Forced to Buy Dollars

December 2010

The Central Bank of Costa Rica (BCCR) reported the acquisition of $ 7.5 million to defend the lower limit of the band system governing the exchange rate.

The BCCR´s intervention on the foreign exchange market increased liquidity in Colones, which in principle, and given current conditions of the monetary system, it did not have the usual inflationary effect.

Costa Rica: Price of the dollar will remain fixed to the upper margin of the exchange rate bands regime.

August 2008

A greater demand for dollars will be one the main triggers in the new exchange rate environment.

The adjustment to the width of the exchange rate bands carried out by the Central Bank on the 16th of July, along with the lack of volatility in the exchange rate, has created a feeling in the market that the US dollar will remain fixed to the upper margin throughout the rest of 2008.

Costa Rican central bank takes action to control surge in dollar

July 2008

The Costa Rican central bank, the BCCR, modified its exchange-rate policy in an effort to control a surge in the value of the US dollar on local money markets.

Under the country's currency-band system, the upper band (the maximum price at which the central bank sells dollars to intermediaries) has been set at 555.37 colons and will be increased daily by six céntimos.

Costa Rica central bank under fire from business leaders

May 2008

Costa Rica's central bank has become involved in a dispute with the private sector whose leaders accuse the financial authorities of failing to make clear how the new exchange-rate system will work.

Business leaders were unhappy with the central bank's intervention in the wholesale dollar market, and accused the bank's governor, Francisco de Paula Gutiérrez, of offering an explanation "that explains nothing".

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