Concern Over Decline Of Dollar Exchange

Exports and tourism operators in Costa Rica have expressed concern over the decreasing trend in the dollar exchange, which as of this morning (July 23) is ¢569.91 for the buy and ¢576.82 for sell for one US dollar, a drop from ¢581.72 and ¢588.06, respectively, from June 24.

Today’s exchange is almost ¢40 colones lower that at the beginning of the year when the exchange rate was well over ¢600 colones per US dollar.

Between early February and mid-July of this year, there has been a fall of up to 38 colones per dollar, as the average rate in the Monex wholesale market fell from ¢613.87 to ¢575.69.

According to the official exchange rate set by the Banco Central de Costa Rica (BCCR) – Central Bank – on November 7, 2018, the dollar exchange hit a high of ¢622.99 for the buy and ¢631.30 for the sell, a difference of more than ¢50 colones from today.

From there, the exchange started a decline to hover in the ¢600 mark until the beginning of may of this year, slowly losing value a colon or two with a big decrease by mid-June.

The official explanation is that the declining trend is mainly attributed to the greater supply of dollars, high local interest rates, and a decline in durable goods imports.

Laura Bonilla, president of the Chamber of Exporters of Costa Rica (Cadexco) said  “… extremely concerned about the trend that has had the exchange rate since December. Today, for every dollar, we are receiving ¢40 less. This makes us less competitive and hits the export sector more, maximum with the numbers down that is presenting the sector.”

Shirley Calvo, executive director of the National Chamber of Tourism (Canatur), explained that “… Any variation in the abrupt or prolonged exchange rate, such as that experienced since February, affects the cost structure of companies and especially ours, which faced the high season with contracts that were agreed long before.”

The business sector, mainly exporters of the country, months ago asked the Central Bank “to avoid distortions in the fixing of the exchange rate by the oversupply of dollars from the sources of financing of the fiscal deficit.”

The dollar exchange rate from January 1, 2018 to July 23, 2019, as published by the BCCR.