Because of the depreciation that the Costa Rican currency has been reporting in the past months, companies and individuals who rent properties will have to pay more colones in those contracts that have been agreed in dollars.
According to data from the Central Bank of Costa Rica, from August 16th to date, the Colon has registered in the wholesale market Monex a depreciation equivalent to almost 11%, leading the dollar price from ¢567.97 to ¢628.85.
During the second quarter of the year, operating volume totaled $3.347 million, an increase of 13% over the same period in 2017.
The Central Bank of Nicaragua (BCN) reported that the increase reported in the third quarter of the year, is mainly caused by the increase in the operations of the currency exchange table of the BCN with banks and financiers.
The exchange rate began in November by recording ¢621 in the windows of some banks and ¢617 in the Monex wholesale market.
In accordance with reports since mid-August, the upward trend of the exchange rate in Costa Rica is not slowing down. According to data from the Central Bank, between August 16th and November 1st in the wholesale market Monex, the Colon has registered a depreciation in relation to the U.S.
In Costa Rica, the currency depreciation persists, with the exchange rate reaching ¢616 in the windows of some banks and ¢610 in the Monex wholesale market.
The increasing trend of the exchange rate in Costa Rica is not stopping. According to data from the Central Bank, between September 27 and October 30 in the wholesale market Monex the Colon has registered a considerable devaluation against the U.S.
The upward trend in recent weeks in the dollar's price against the Colon has slowed.
According to figures from the Central Bank (BCCR), the exchange rate on the Monex wholesale market increased between August 17th and October 11th, from ¢568.35 to ¢597.43 per dollar, equivalent to a depreciation of 5.12%.
However, the constant depreciation registered by the Colon started to be contained at the end of last week, since on October 12th the weighted average in the Monex wholesale market was ¢595.41. The BCCR reported yesterday that the exchange rate dropped to ¢594.56 and today to ¢594.24.
During this year, the Central Bank of Costa Rica has had to spend $1.1 billion of its reserves to participate in the exchange market and counteract the upward trend in the dollar price with respect to the Colon.
According to figures from the Central Bank of Costa Rica (BCCR), from August 17 to October 12 the exchange rate in the wholesale market Monex has been increasing, going from ¢568.35 to ¢595.46 per dollar, which is equivalent to a depreciation of 4.76%. [GRAFICA caption="Click to interact with the graph"]
The Costa Rican currency continues to depreciate, and the exchange rate in some Banks was already 600 Colones and more per dollar.
The upward trend of the exchange rate in Costa Rica has been observed in recent days. The Central Bank estimates that between September 27 and October 11, the exchange rate in the wholesale market Monex reported a clear upward trend, which is reflected in the increase from ¢570.75 to ¢597.43 per dollar, equivalent to a depreciation of 4.67%. [GRAFICA caption="Click to interact with graphic"]
The exchange rate in the wholesale market Monex reported a clear upward trend during the first four days of the week in Costa Rica, increasing from ¢589.49 to almost ¢600 per dollar.
The Costa Rican currency depreciation against the U.S. dollar has been increasing in recent weeks, mainly due to the uncertainty over the fiscal situation and the greater perception of risk by investors and consumers, even though the tax reform law has already been approved in the first debate. The new law's future depends on the Constitutional Chamber, which must give its approval before being discussed and eventually approved in the second debate. See: "Tax reform: Partial Solution." [GRAFICA caption="Click to interact with the graphic"]
The impact of the strike, the uncertainty of the fiscal situation and the increased risk perception by investors and consumers, explain much of the depreciation that the Colon is suffering against the dollar in Costa Rica.
Figures from the Central Bank of Costa Rica (BCCR) suggest that between September 27th and October 5th the exchange rate in the wholesale market Monex registered a significant upward trend, which is reflected in the increase from ¢570.75 to ¢591.25 per dollar, equivalent to a depreciation of 3.59%.
The volume of operations in the foreign exchange market totaled $1.233 billion in August 2018, registering an increase of 23% with respect to the same month in 2017.
The volume of operations in the foreign exchange market totaled $1.233 billion in the month of August (purchases: $485.7 million and sales $747.3 million), with a daily average of $45.7 million, reported the Central Bank of Nicaragua (BCN).
Even though the Central Bank of Costa Rica intervened yesterday selling $31 million in the foreign exchange market, at the end of the day the exchange rate in the Monex market stood at ¢585.8 per dollar.
According to figures from the Central Bank of Costa Rica, between September 25 and 26 the weighted average exchange rate in Monex rose from ¢579.54 to ¢581.76.This depreciation came a day after the government announced that with a "loan" of $866 million from the Central Bank, it would pay part of its current obligations for the last quarter of the year.See: "Clutching at Straws" in Costa Rica".
Since the beginning of the year Banco de Guatemala has intervened in the foreign exchange market buying foreign currency in order to curb appreciation of the local currency against the dollar, but in recent weeks it has been selling currencies in order to minimize depreciation.
In recent weeks the exchange rate of the Quetzal against the US dollar has been trending upwards, which has forced the Bank of Guatemala (Banguat) to sell foreign currency in the foreign exchange market.So far this year, up until September 24, it has had to intervene selling $402 million worth of foreign currency.
Uncertainty caused by the deteriorating fiscal situation and the economic slowdown are the reasons for the increase in the dollar exchange rate compared to the Colón, which has seen twelve days of consecutive increases.
According to Central Bank authorities, the depreciation of the local currency in relation to the US dollar is partially explained by the doubts generated by the deterioration of public finances and the absence, to date, of a legislative agreement to resolve at least part of the problem, all in the context of rising international interest rates.
After three months of relative stability, the price of the US currency compared to the Colón increased from ₡568 in mid-August to ₡571.6 at the end of the month.
Nacion.com reports that "...Although the variation is small, since it is only 0.64%, it breaks a stable period that was maintained from May 31 to August 14.In that period it remained very close to ¢568."
The volume of operations in the foreign exchange market totaled $1.067 billion during July 2018, registering an increase of 13% with respect to the same month in 2017.
The volume of operations in the exchange market totaled 1,068.0 million dollars in the month of July (purchases: US $447.0 million and sales US $620.9 million), with a daily average of 44.5 million dollars, reported the Central Bank of Nicaragua.