Exchange rate main short-term impact of British vote

Despite the British vote Thursday, the European Union still is Costa Rica’s second largest trading partner. The decision by British voters to leave the European Union is not expected to have a short-term trade impact.

Expats and business operators here with accounts in Euros or British pounds will be feeling the impact of the vote this morning. Both currencies dropped after the results of the vote became known.  The euro was down about 3 percent, but the pound was flirting with 10 percent. Speculators were blamed.

In the long run, if the decision sticks, Costa Rica will have to make additional trade agreements with London to replace those now with the entire European Union.

Analysts in Europe attributed the surprising British vote to feelings about immigration and sovereignty.

There also were concerns about a more intrusive European Union bureaucracy and its many regulations.

The analysts also say that disengagement may take two or more years to complete, according to wire service reports.

Final votes were posted shortly after midnight Costa Rican time. Those wanting to leave the European Union were about 52 percent.

Costa Rica exports coffee, bananas and pineapples to the European Union.

Exports of electronic components have suffered with the decision of Intel Corp. to begin manufacturing in Vietnam.

Trade between the European Union and the entire Central America was 11.6 billion euros in 2014, according to EU sources. That is nearly $13 billion. Central American exports more than it imports.The EU has offices in El Salvador, Guatemala, Honduras, Nicaragua and Panama, as well as Costa Rica. Britain also maintains embassies in most of those countries.

By early morning, there were no statements from Costa Rican officials on the vote.

This entry was posted in Costa Rica News. Bookmark the permalink.