QCOSTARICA — The sharp drop in the dollar exchange rate in the last year and a half has made Costa Rica the world champion in appreciation of the local currency, the Colon’ according to Gerardo Corrales, economist at Economía Hoy.
This means that no other country has appreciated its currency so much in relation to the U.S. dollar.
Between June 2022 and December 2023, the U.S. dollar lost 24% of its value against the Costa Rica Colon, placing Costa Rica in first place in this ranking, ahead of Mexico and Switzerland, by far, given that their respective currencies only appreciated by 13% and 12%, respectively.
As of this Friday, the official dollar exchange reference rate set by the Central Bank (Banco Central de Costa Rica) is ¢512.61 for the buy and ¢517.48 for the sell.
On June 23, 2022, the reference rate was ¢691.20 for the buy and ¢698.44 for the sell; at the end of December 2023, the rate was ¢519.74 and ¢526.18, respectively.
Far from being good news, this means that sectors dependent on the global market are rapidly losing competitiveness and money, which translates into a contraction in investment and fewer jobs.
The positive side is that by December of last year, Costa Rica was the country in the Organization for Economic Cooperation and Development (OECD) that reported the lowest inflation, which was even negative at -1.8%.
“Negative inflation is achieved but with a great loss of competitiveness that is destroying the productive sector and will increase unemployment in the medium term. There is no balance,” Corrales said.
“Complications” regarding the dollar exchange rate have been a source of discussion in recent months.
The productive sectors are calling on the government of Rodrigo Chaves and the Central Bank to intervene in the exchange market and control the appreciation of the colon.
“The diversity of our associates forces us to express concern about the impact that the exchange rate is having on a large part of the country’s productive sectors. We believe that a consensual position should be established on the fundamentals on which the relationship between the dollar and the Costa Rican colon should be based, and that it should not affect the stability and economic and social development of the country. A stable and competitive exchange rate that reflects the real value of the national currency can be beneficial, as it helps maintain the competitiveness of exports and imports, attract foreign investment and maintain the economic stability of the country,” said Antonio López, director executive of Fedecámaras – Costa Rica.
The call for attention from the productive sector occurs in the same week in which legislators, economists and businessmen ask the Central Bank to account for the behavior of the dollar exchange.
