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.
Last year, economic activity and employment generation continued to rise, cumulative inflation reached 5.7% and international reserves were strengthened.
From a statement issued by the Central Bank of Nicaragua:
In a new effort to avoid abrupt increases in the exchange rate, the Central Bank has announced that it will now be able to sell more dollars directly to public institutions.
So far the Central Bank has had to respect the limit of 8% of the average balance of the Net International Reserves in direct sales of dollars to public sector entities.The Central Bank decided to eliminate this limit in order to be able to sell them the dollars that they require and thereby avoidturning to the wholesale Monex market to buy them from financial entities
In September an intervention was made in the exchange market through the sale of $81 million in order to avoid upward pressure on the exchange rate.
The $81 million that the Central Bank sold on the wholesale market to try to minimize upward pressure on the exchange rate is almost half of the amount it has injected so far this year.
In the first nine months of the year the Bank of Guatemala has intervened in the exchange market with $1 billion in order to keep the Quetzal from appreciating further.
The increasing flows of remittances coming into the country are the main reason behind the appreciation of the Quetzal against the Dollar. So far this year the Bank of Guatemala has had to intervene by acquiring more than $1 billion, thus increasing monetary reserves.
From December 31, 2011 to August 2 2012, INR declined by nearly $29 million, which represents 5.1% of the total.
According to an article in Tiempo.hn "The mainstay of foreign exchange is still remittances sent by around one million Hondurans who live mainly in the United States and other European countries like Spain. The amount in remittances is larger than other currency generators such as the export of products.
A record amount of $1.938 billion in gross international reserves has been recorded in the country, a reflection of the stability and economic growth in recent years.
Mario Arana, former president of the Central Bank of Nicaragua (BCN) notes that the policy of fiscal discipline that has been maintained, has allowed the reserves to accumulate, which provide an optimistic outlook on any external shocks generated by the current problems of the industrialized economies.
A week after Antenor Rosales declared that international reserves "are not to be managed according to someone’s whims and preferences", he has been dismissed by President Ortega.
The Higher Council of Private Enterprise has welcomed a proposal by President Ortega, to put international reserves funds into the Banco del Alba , provided legal procedures are followed.
"What we want to make clear is that it has to be in line with the law, on the one hand, but in the medium term, yes, it will mean (...) net resources for Nicaragua, we have to see it in that context," said Jose Adan Aguerri , president of COSEP, according to LaPrensa.com.ni.
Savings must be made and reserves accumulated during booms times, so that those funds can be used in times of national crisis or contraction.
The creation of funds to build up currency reserves during periods of economic expansion from specific high-revenue sources, such as China's trade surpluses, Chile's copper or Norway's oil, is an option to be considered in Panama, which does not have a central bank to control monetary policy or act as a lender of last resort.
The current amount would pay the country’s entire national debt.
The country's strong economic performance, the increase in remittances and a rise of almost 20% in exports has allowed the growth of international reserves, an important macroeconomic indicator which measures the country's payment capacity.
The Central Bank of Costa Rica (BCCR) reported the acquisition of $ 7.5 million to defend the lower limit of the band system governing the exchange rate.
The BCCR´s intervention on the foreign exchange market increased liquidity in Colones, which in principle, and given current conditions of the monetary system, it did not have the usual inflationary effect.
Markets closed with the dollar at ¢518.34, ¢7.88 higher than the day before, after the Costa Rican Central Bank's (BCCR) decision to increase foreign exchange reserves.
Since the BCCR announced the news, the dollar's price increased steadily, reaching a high of ¢523,01 before finally closing at ¢518.34.
Rodrigo Bolaños, president of BCCR, said that, "in the coming days it will be interesting to see what direction the exchange rate takes because just the announcement alone has caused it move up by several colones," reports Nacion.com.
The monetary authority has launched a scheme to acquire international reserves, immediately causing the exchange rate to rise.
In his blog for Nacion.com the analyst Jorge Guardia highlights that this intervention represents a trimming and sprucing within the limits and a fundamental change in Central Bank (BCCR) policy that lacked due transparency.
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