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.
Monday, August 4, 2008
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. In the last few days, the exchange rate has remained stable at upper margin of the bands, and therefore no major changes are expected for the rest of the year.
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.
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.
Francisco de Paula Gutiérrez, president of Costa Rica's central bank, hit back at critics of the bank's monetary policy.
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.
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