A rebound in demand for US dollars explains the increase of just over 5.36 colones registered in the price of the foreign currency with respect to the colon from the end of May to date.
The price of the dollar in the wholesale Monex market rose again in recent days, in response to an increase in demand for foreign exchange, normal at this time of year.
La Nacion explains that from August 11 to 30, the Banco Central de Costa Rica (Central Bank) had not sold the foreign currency in the market to stabilize the exchange rate. Last week the entity sold US$13 million in one day and this week it has sold the cumulative amount of US$19.6 million.
To effect sales, the Central Bank uses its reserves, which are the resources the country has to deal with external emergencies.
As of September 5, said resources amounted to US$ 6.78 billion.
According to the document Aproximación de patrones estacionales en el mercado cambiario de Costa Rica (Approximation of seasonal patterns in the Costa Rican exchange market), a study from October 2006 to June 2013, the period between April and October is a time of less foreign exchange and therefore the exchange rate tends to increase.
Economist Alberto Franco commented that nothing extraordinary is observed in the data of the exchange market of the last weeks.
However, economist Alberto Franco commented, “that nothing extraordinary is being seen in the data on the exchange market from the last few weeks. This movement in prices I would describe as normal, reflecting, in recent days, a slightly deficient market, and with sales of central bank currencies (not considerable) probably in order to soften the effect on quotes.”
Franco added that as the month progresses, a seasonal effect could be observed where the foreign exchange market, due to the liquidation of dollars, mainly by companies, to meet obligations of year-end of the closing or the fiscal year (October 1 to September 30).
September is the month used by businesses in Costa Rica to take empty their warehouses of merchandise and sell it under the form of promotion or special offer. This temporary market dynamics announces the arrival of the closing of the fiscal year.
