A bill is being prepared to impose taxes on money which enters the country seeking to exploit the gap between interest rates in local currency and in dollars.
Furthermore President Chinchilla has issued a directive to state banks to stop competing with each other to attract investments from large institutions, such as the Instituto Costarricense de Electricidad, the Social Security Department, or the National Insurance Institute.
Investors are focusing on local currency due to its renewed value and the issuance of bonds at higher interest rates.
Elperiodico.com.gt outlines, "The Bank of Guatemala (Banguat), informed that payments in foreign currencies reached Q21.3 billion in December and Q23.0 billion during February, while payments in Quetzals went from Q106.2 billion to Q105.6 billion over the same period of time.
Investors might be seeing the Costa Rican Colon as a risky asset with good yields for “carry trade” transactions.
ALDESA reported that the ups and downs of the Costa Rican currency are being monitored by international investors, in addition to the recent comments by the new president of the Central Bank, who suggested more future intervention to ease the currency’s volatility.
The recent increase in the value of the Costa Rican colon versus the dollar is worrisome, not only because there are no clear reasons to explain it, but also because it would be hard to contain it without causing greater problems.
In the past weeks, and without apparent reason, the price of the U.S. dollar in Costa Rica dropped considerably.
Last week we surveyed some financial operators as to why these movements where occurring, the general answer being: “we don’t know”.
The monetary authority of Guatemala, Banguat, continued to intervene in the market by selling dollars to address a rise that could be due to speculation.
Authorities and analysts argued about the causes for the appreciation of the US currency for which there are apparently no clear causes.
Yesterday, March 18, the reference exchange rate was Q8.10 for $1 US, while at some banks the selling price of the currency was being quoted between Q8.14 and Q8.18.