Costa Rica Dollarization

Fluctuations in the exchange rate in recent weeks are forcing the possibility to be seriously considered.

Friday, September 24, 2010

This is what Luis Loría, director of Costa Rica's National Association for Economic Development (ANFE in Spanish), told a conference looking at the pros and cons of dollarization in the light of international experience.

Meanwhile the economist and ex trade minister, Alberto Trejos, argued that now is not the time to abandon the colón, Costa Rica's currency.

"The country has enough foreign exchange reserves to implement the change estimated Loría. However, Trejos took the view that taking into account the impact of the exchange process the reserves might not be sufficient," writes Leticia Vindas for Elfinancierocr.com.

More on this topic

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".

Devaluation Complicates Tourism in Costa Rica

November 2010

Two thirds of the country's tourism businesses have been negatively affected by the 15% increase in the value of the Colon.

The tourism industry in Costa Rica, which represents 7% of the GDP, receives most of its revenue in Dollars and pays most expenses in Colones. This puts them as one of the sectors most affected by the sharp appreciation of the Colon.

Think Tank Proposes Dollarization in Costa Rica

May 2010

ANFE, the National Association For Economic Development, formally presented a project called “Monetary Responsibility and Dollarization Bill”.

From ANFE’s press release:

“This project is a reaction to the fact that during the past six decades, the Central Bank has artificially created economic winners and losers every time it intervenes in the market.

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