Friday 18 June 2021

Banks Fear Increased Requests To Change Loans From Dollars to Colones

The dollar exchange has been on the rise, in the past week alone it has increase by more than ¢6 colones for each US dollar.

The dollar exchange has been on the rise, in the past week alone it has increase by more than ¢6 colones for each US dollar.

Q MONEY – A hike of ¢9.64 colones in the dollar exchange market since last Friday alone has some bank customers scared, and banks anticipating a significant increase in the number of their clients interested in changing their loans from dollars to colones.

The dollar exchange has been increasing steadily since the beginning of the month.

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Although the wave of changes has not occurred yet, bank officials say they are willing to address the concerns of the clients.

However, they warn customers not to get carried away by the first rise, calling for prudent action in the current situation.

Peaking at ¢581.90 for the sell on Wednesday, the reference rate set by the Banco Central closed Thursday at ¢583.37, while the rate last Friday was ¢573.74.

Hairo Rodriguez, spokesperson for the Costa Rican Banking Association (ABC), says a devaluation of 10% from last year’s levels that would bring the dollar exchange close to or at ¢600 colones, would cause many to seriously consider switching their dollar loans to colones.

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The banks are not required to make the change if a client requests, but, according to the ABC spokesperson, financial entities will surely address the concerns of their clients.

“It is a matter of satisfying the customer, but it depends on each bank, each is going to do a new valuation of the client, if it is asked for a change,” warned Rodríguez.

Economist Danilo Montero said that the current situation, expected by the end of last year or the beginning of the year, was totally foreseeable, but it is occurring now.

“I do not see the exchange rate unraveling and the debtor should consider the cost of commissions if he/she decides on changes to the loan,” warned the economist.

In general, the banking sector is asking for clients not to rush to decisions and expect no abrupt changes in the dollar exchange.

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