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.
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.
Costa Rica: Price of the dollar will remain fixed to the upper margin of the exchange rate bands regime.
A greater demand for dollars will be one the main triggers in the new exchange rate environment.
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.
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.
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