Pressure build up for cheaper Costa Rican colón

Pressure is building to step up the depreciation of Costa Rica's colón.

Tuesday, May 20, 2008

Analysts say that, though the turbulence in the money markets is over for the time being, factors persist that point to a depreciation of the colón over the next year to 18 months.
With investors switching from the colón to the dollar, pressure is sure to build up on the Costa Rican currency, said analyst Andrés Víquez.

More on this topic

Why Costa Rica’s Currency Will Depreciate

February 2012

Several experts have mentioned factors that justify this forecast, including foreign currency purchases by the government.

It has been mentioned that the market is currently very "colonized" by investors enjoying higher returns on the local currency, the Colon, which has been paying out better rates than U.S. dollars.

More on the Role of Central Banks

May 2011

"The job of a central bank is not to accelerate the growth of the economy" said Rodrigo Bolaños, President of Banco Central de Costa Rica.

The Costa Rican economy is not currently showing the previous dynamism shown in the period from the mid-nineties to the global crisis of 2008.

Further Devaluation of Costa Rica's Currency Projected

May 2014

It has been noted that the Costa Rican Colon could depreciate 20% more against the dollar in the U.S. and with that correction the exchange rate will reach 650 colones per dollar during 2014.

The accelerated depreciation of the colon against the dollar in the first months of this year could continue throughout 2014.

Losses of Over $140 million Due to Appreciation of Colon

March 2013

The Chamber of Exporters of Costa Rica has detailed the losses by the sector caused by the significant appreciation of the colon in the last three years.

As explained by CADEXCO, producers of meat, sugar and coffee suffered more than 70,000 million colones in losses, while for the banana industry is it calculated at $0.80 per box exported.

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