Banco Central announces new exchange rate plan

By the A.M. Costa Rica staff

After several weeks on the rise, the exchange rate had its first decrease Thursday morning thanks to a new injection of dollars by the Banco Central, which sold $1 billion in the currency exchange market.

According to data provided by the bank, the reference price for each dollar sold stood at 587.47 colons during the morning. In regards the average price for all other banks, dollars were sold at 595 colons each and bought at 585.56 colons.

During a press conference, Banco Central also confirmed three new measures to keep the exchange rate steady.

First of all, it will continue selling dollars whenever required from its $7.2  billion reserve. Secondly, the bank announced it will intervene in the currency market anytime during the day in order to protect the exchange rate from violent changes.

Finally, the monetary policy rate was increased from 3 to 4 percent  for the fourth time in the year.

This allows commercial banks to increase the interest rates for savings in colones, making them more attractive for the general public.

These measures seek to prevent any pressure on the inflation rates and the consequent hike in the prices of goods and services. The central bank forecasts a maximum inflation of 4 percent for 2017.

The shortage of dollars is attributed to a macroeconomic incertitude from the Donald Trump administration in the United States.

This has led many investors to secure their funds by accumulating dollars.

Another reason, according to the bank, is an increase in the amount of Costa Ricans who prefer to keep their savings in dollars, because the interest rates in colons are not attractive.

A third reason, provided by the bank, is the increase in imported goods during the first quarter of 2017, which also need to be paid in dollars.

 

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