It’s been a roller coaster for the dollar exchange the last couple of months, reaching a high of ¢631.30 on November 7, then dropping back down to ¢600 and staying there the past couple of weeks.
However, the exchange rate began climbing again the last couple of days, quickly gaining almost ¢10 colones, closing the year at ¢611.75, an appreciation of 7% over the close in 2017, driven mostly by a strong demand for the US dollar by the public sector, especially the government, to pay interest on the debt and maturity of securities.
The Banco Central (Central Bank) had to sell US$3 billion of its reserves during the year, while in 2017 it was US$1.88 billion.
“The main reason (of the appreciation) was the Government’s need to obtain liquidity in dollars to pay obligations, which caused the exchange rate to begin to rise. The Treasury is usually a bidder of dollars, but in the last semester of this year it was, on the contrary, a forex trader,” said William Porras, an economist at Ecoanálisis.
Even the Central Bank attributed the rise in the dollar to the deterioration of public finances.
“The seen (with the dollar) reflects the uncertainty of the fiscal situation, on the direction of public finances and the bill of strengthening public finances (Plan Fiscal). This has generated uncertainty in the market and in the public and a direct pressure on the exchange rate,” explained Rodrigo Cubero, president of the issuing body, on October 31.
Cubero acknowledged that on that day (October 31) most of the dollars sold went to the Government.
During the year 2017, the exchange rate rose slightly, opening the year at ¢561.10 and closing it at ¢572.56.
The rate began climbing quickly in September (2018), closing the month at ¢585.80.
A month later, the dollar exchange had broken the “600” barrier, closing the month at ¢610.74 (October 31) to quickly hit its highest point a week later (¢631.30 on November 7), then to drop just as quick closing the month (November) at ¢603.10 where it remained for most of this month (December). Until a few days ago.