The doubts generated by the fiscal proposal with which the Costa Rican government plans to discuss a loan with the IMF, would be the main cause of the recent upward trend in the dollar's price, which as of September 29 was quoted at ₡604,52.
The figures of the Central Bank of Costa Rica (BCCR) report an upward trend in recent days, since between September 11 and 29 the price has risen from ₡595,41 to ₡604,33, which is equivalent to a 2% variation.
In the last 15 days, the price per dollar in the wholesale market has risen ₡16, which can be explained by economic uncertainty and people's preference for buying dollars.
According to data from the Central Bank of Costa Rica (BCCR), a rising trend has been reported in recent weeks. Between March 11 and 26, the price has risen from ₡565.69 to ₡581.77, equivalent to a 3% variation.
During 2019, the price of the dollar in Costa Rica registered multiple fluctuations; however, for this 2020, such abrupt variations are not anticipated, since the Central Bank starts the year with reserves close to $9 billion.
Data from the Central Bank of Costa Rica (BCCR) show that between February 4 and November 28, 2019, the average dollar price in the Costa Rican market fluctuated considerably, ranging from ₡614.31 to ₡562.63.
In Costa Rica, it is expected that the downward trend that has been showing the exchange rate since February will intensify in the coming months, when the $3.580 million begins to enter as a result of the issuance of Eurobonds and loans granted by external entities.
According to data from the Central Bank of Costa Rica (BCCR), between the beginning of February and July 30 of this year, there has been a fall of up to 44 colones per dollar, reporting a drop in the average rate in the wholesale market Monex from ¢613.87 to ¢570.13.
In Costa Rica, exporters and businessmen of the tourism sector are concerned about the decreasing trend that in recent months has reported the exchange rate, which on July 18 was quoted at ¢575.7 per dollar.
Official figures report that between early February and mid-July of this year, there has been a fall of up to 38 colones per dollar, as the average rate in the Monex wholesale market fell from ¢613.87 to ¢575.69.
In a competitive scenario for lower costs and higher productivity, devaluation against the Lempira Dollar in Honduras and the Cordoba Dollar in Nicaragua is a factor that could help these economies stay competitive.
In the last five years, the exchange rate in Honduras increased by 17%, from 21.06 Lempiras per U.S. dollar in June 2014 to 24.67 in the same month in 2019.
A greater supply of dollars, high local interest rates and a decrease in imports of durable goods explain the decreasing trend of the exchange rate in Costa Rica, which on June 18 reached the lowest level of the year.
In 2018, the dollar price against the Colon was on an upward trend, however, between February 6 and mid-June of this year, there has been a fall of up to 28 colones per dollar. [GRAFICA caption="Click to interact with graph"]
In Costa Rica, exporters ask the Central Bank to "avoid distortions in the fixing of the exchange rate because of the oversupply of dollars from the sources of financing for the fiscal deficit."
At the end of 2018 and the beginning of 2019, the dollar price against the Colon reported an upward trend, but from February 6 to mid-June 11, there has been a fall of up to 26 colones per dollar.
In Costa Rica, the exchange rate of the Colon against the Dollar began 2019 upwards, but from February 6 to mid-May, a fall of up to 26 colones per dollar has been reported.
After the average exchange rate against the Dollar in the Monex wholesale market increased from ¢609.05 to ¢613.87 between January 1 and February 6 of this year, there have been continuous declines in recent months, with one of the lowest levels of the year being recorded on May 16, ¢587.97.
In Costa Rica, in the first half of the month, the exchange rate of the dollar with respect to the colon recorded a downward trend, however, from January 16 to 24 it increased almost 9 colones per dollar.
After the average exchange rate against the dollar in the wholesale market fell from ¢610.7 to ¢600.3 between January 8 and January 16, Monex has registered continuous increases in the last few days, rising to ¢609 on January 24.
The economic environment in 2018 was defined by a context of fiscal uncertainty, economic slowdown and greater financial volatility, together with a difficult external environment.
Regarding the fiscal uncertainty occupying a large part of last year's economic agenda, explains the Central Bank of Costa Rica (BCCR) which was originated, firstly, in the electoral process that lasted until April, and later in the difficulties faced to achieve an agreement that would help restore the sustainability of public finances in the medium term.
Following the Constitutional Chamber's judgment on the tax reform, the exchange rate in Costa Rica temporarily stopped rising, but it is expected to restart upward trend in the coming months.
According to figures from the Central Bank of Costa Rica (BCCR), from mid-August to the first week of November, the Colon depreciated rapidly. However, after Fourth Chamber prepared the tax reform in Congress a few days ago, the dollar's price against the local currency stopped rising.
In Costa Rica, businessmen in the sector expect that the depreciation of the local currency against the dollar will raise the price of finished construction materials, which are mostly imported.
According to data from the Central Bank of Costa Rica (BCCR) between August and October of this year, the exchange rate of the Colon against the Dollar had a fast rise, and although in recent days some signs have shown that the depreciation of the local currency has declined, businessmen in the construction sector expect increases in costs.
After the fast depreciation that the Costa Rican currency suffered weeks ago against the Dollar, in the last seven days the exchange rate has fallen from ¢629 to ¢615 per dollar.
Between August 16th and November 6th, the exchange rate in the wholesale market Monex registered an increase of 11%, rising from ¢567.97 to ¢628.81. However, since November 7th the price of the U.S.
With the purpose of "reducing pressures in the exchange market," the Central Bank of Costa Rica increased the interest rates of its term deposits as of November 7th.
With this increase in the interest rates of the Central Bank's deposit instruments, which is added to the one made last week, the entity seeks to foster savings in colones, particularly in instruments with longer terms.