Devaluation Complicates Tourism in Costa Rica
Two thirds of the country's tourism businesses have been negatively affected by the 15% increase in the value of the Colon.
Friday, November 5, 2010
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.
While interest rates for local currency remains at current levels, dollars will continue to enter the Costa Rican economy, which will prevent its devaluation.
The National Chamber of Tourism said that the appreciation of the colon against the dollar is hitting the sector hard in terms of competitiveness as a tourist destination.
Volatility in the foreign exchange market and a dollar priced under 500 colones are strongly affecting the Costa Rican tourism industry.
The latest announcements in Costa Rica about greater exchange rate flexibility to appreciate the colon are worrying exporters.
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