Monday 25 September 2023

Decline of dollar exchange stopped!?

On Wednesday, August 24, the average price of the dollar in the Monex market reached a minimum of ¢635.96; in the last two days it rose ¢8

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Dollar Exchange

¢538.05 BUY

¢543.60 SELL

23 September 2023 - At The Banks - Source: BCCR

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QCOSTARICA – In the past few weeks, the dollar exchange decreased by ¢35 colones, from ¢675.02 for the sell on August 1 to ¢639.28 on Wednesday, August 26.  The buy went from ¢667.61 to ¢633.09, respectively.

On June 23, the reference rate quoted by the Banco Central (Central Bank) was ¢698.44, while the exchange at most banks toppled the ¢700; the buy was ¢691.20 on that day in June. See the historical exchange rate (tipo de cambio) figures by the Central Bank here.

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At the banks, this Saturday morning, August 27, the sell ranges from ¢647 to ¢650; the buy ¢632 to ¢635. See here the BCCR list of financial institutions and their exchange rate.

It appears that the downward trend from the last week in June, after the Central Bank announced measures to reduce upward pressures, that accelerated in the last two weeks, has come to an end.

The downward trend, according to experts, was influenced by the fall in international prices of raw materials and the lower demand for dollars to pay for foreign purchases. One major purchaser abroad is the RECOPE, the Costa Rican refinery that refines nothing, pressuring the demand to keep the fuels tanks of the country full.

To that, we have to add the approval and disbursement of the US$1.1 billion dollar loan from the Fondo Latinoamericano de Reservas (FLAR) – Latin American Reserve Fund.

Economists see a “more stable” behavior of the exchange rate and forecast the dollar to start climbing again. Some even go as far as forecasting a dollar exchange near ¢700 colones to one US dollar by the end of the year.

“We believe that the exchange rate will remain stable. But upward pressures exist. Especially if the issue of Eurobonds is delayed, which seems to go further towards October. At the moment, what the market reflects is the change in the investment strategy of the operators”, Daniel Ortiz, executive director of Cefsa, told La Nacion.

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Economist and founder and consultant of Ecoanálisis, Alberto Franco told the Q the expectations of recovery in tourism and the higher interest rates in colones, could be a correcting factor in the dollar exchange, however, predicting the exchange rate in a flexible market is practically impossible.


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