QCOSTARICA — On September 13, the price of the dollar reached the lowest price in eight years in the Foreign Currency Market (Monex).
Since then, the U.S. dollar has remained below ¢540, and the Banco Central (Central Bank) even intervened last Friday to sell US$3.9 million dollars in the market and thus avoid a slight upward trend.
The weak dollar has a direct impact on those who receive their income in dollars and for businesses, causing a decrease in profits and fewer job opportunities, as noted by businessmen.
However, it is inescapable that it also has a positive side.
This could be a good opportunity to consider traveling, as airfares are lower, as well as services purchased overseas, while a favorable exchange rate can make buying a vehicle or advance payments on loans or credit cards affordable, as experts have suggested.
“The main recommendation is to buy dollars to reduce liabilities in dollars, even considering the possibility of ‘colonizar’ (colonizing) some liabilities if it makes sense from the point of view of interest rates, which are similar in both currencies. The second would be to buy dollars to start saving in that currency, with a long-term view and not as a speculative issue. The third is to try to convert contract contracts that are in dollars into colones, which would help to maintain the current cost of a service,” said Adriana Rodríguez, General Manager of ACOBO Sitio de Bolsa.
Ten recommendations
Following are ten recommendations that experts give to take advantage of a low exchange rate.
- Savings. If you have savings, you could buy dollars with the expectation of making a good profit when the dollar rises in price
- Investment. Invest in financial instruments in dollars such as certificate deposits. Of course, always doing a risk-return analysis
- Debt payment in dollars. If you have loans in dollars and income in colones, it is a good time to advance payments and take advantage of a cheap exchange rate, so that at the end of the day you will be generating significant savings
- Travel. With a cheap exchange rate, it is a good time to travel, since not only the airfares will be cheaper when converting to colones, but also the services you pay for abroad, such as food, lodging, and tours
- Short-term purchases. If you make purchases of goods and services with credit cards, you must ensure that they have a short-term payment; In addition, you must make sure you have the budget in colones to buy dollars in the future, since the exchange rate will not remain cheap forever. For now, it is estimated that it will remain below ¢560 for the remainder of the year.
- Christmas has arrived. For consumer items that you have wanted to buy so much abroad, you can do so now and thus take advantage of the cheap exchange rate. Likewise, you can take the opportunity to advance the acquisition of Christmas gifts. Many stores have already Christmas merchandise on their shelves.
- Opportunity for entrepreneurs. People with a business, large or small, can take advantage of the exchange rate to buy machinery or supplies at an advantageous price, so that they save money and manage inventory in the face of greater demand
- A new car. You could consider investing in imported durable goods, such as a vehicle. However, it must be taken into account that when buying on credit there is a future expectation, so it is necessary to project the expense with a more expensive dollar, so as not to complicate your future finances.
- Advance payments. It is worth buying dollars right now to reserve them for recurring payments in that currency
- Prudence. It is important to keep in mind that the exchange market is likely to remain volatile for the rest of the year; however, the exchange rate policy set in place several years ago has adopted a free-floating exchange rate system. It is essential to comprehend the factors that affect the exchange rate, its trajectory, and the potential for fluctuations.
Downturn
Another aspect that economists point out is that the exchange rate will remain cheap for the rest of the year. In that sense, investments have to have a projection and expect a possible increase, when acquiring assets such as real estate or vehicles.
“The excessive supply of dollars seems to respond to determinants of the real economy, related to the greater dynamics of economic activity, greater exports, due to tourism that is recovering, among others; but also for a demand that is satisfied and does not generate pressure. These conditions do not seem like they will change in the remainder of the year; on the contrary, there could be some greater push from the tourist side due to the high season,” added Silvia Jiménez, manager at Inversiones Mercado de Valores.
“The current exchange rate of the dollar is favorable for those looking to make a purchase of property or vehicle. If you are considering buying a house or automobile, you may be able to acquire a loan at a more affordable rate, depending on the current market. Both businesses and individuals have the potential to save or invest in the dollar and profit from the exchange rate difference in the future,” according to Vidal Villalobos Rojas, Economic advisor at Grupo Prival.
