The Costa Rica News (TCRN) – The Central Bank of Costa Rica (BCCR) announced today that on Monday it intervened in the currency market by selling $31.6 million in order to avoid an abrupt rise in the exchange rate.
The BCCR said today in a statement that they intervened in the market due to “an upward fluctuation in the exchange rate that the central bank was violent.”
“The BCCR maintain its policy of intervening in the foreign exchange market when violent fluctuations are present, but not to entirely eliminate volatility. That volatility can be either upward or downward,” said the bank.
The reference exchange rate of the dollar closed Monday at 546.28 colones, 1.08% increase from 540.45 colones the previous day.
Costa Rica uses a system of checks that has a ceiling of 820 colones, which allows the central bank to intervene if it considers that the variations too strong.
The BCCR recommends that the public and businesses should act with prudence and good advice before making important decisions related to the exchange rate.
“The fact that the exchange rate has been climbing is no guarantee that it will continue in that direction. That depends on the behavior of the supply and demand for dollars in the market,” they added.
So far 2014 Costa Rica has experienced an upward trend in the dollar. On January 1 the selling price was 507.80 colones and now stands at 546.28, which is a variation of 7.57%.
Political analysts have attributed this rise to internal factors such as the presidential elections and purchases of state institutions, and external situations and policies of the U.S. Federal Reserve. (ACAN-EFE)
The Costa Rica News (TCRN)
San Jose, Costa Rica