Friday, 23 October 2020

Do not be alarmed by dollar exchange at ¢600, it is a cyclical behavior

(QCOSTARICA) The behavior of the dollar exchange in recent weeks has not gone unnoticed, so far this year it has increased more than ¢25, on average.

“At this time, and under normal conditions, we would be in the low tourist season, which implies a lower availability of foreign currency,” said Karla Arguedas, manager of Prival.

While six months ago it was trading between ¢570 and ¢575 for one US dollar, it is currently around ¢591 and ¢597, dropping a couple of colones from the hight of ¢600 for the sell a few days ago.

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Although COVID-19 has had an impact on the exchange rate, due to the fall in tourism, the closure of borders, the restriction of entry of tourists, and the decline in foreign trade, it is also true that at this time of year the dollar exchange has always tended to rise, analysts warn.

Historically for this date, typically there is a rebound in demand and a drop in tourism due to the rainy season, they explain. In turn, they warn that the margin in the exchange rate has remained below 5%, not requiring the intervention of the Central Bank.

However, if you have a company, you should not neglect some aspects, which can generate changes in your income and expenses as a result of exchange rate variations.

Experts agree that the fluctuation in the last couple of weeks obeys the cyclical conditions that the local economy normally faces.

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“At this time, and under normal conditions, we would be in the low tourist season, which implies a lower availability of foreign currency,” explains Karla Arguedas, Manager at Prival Advisory & Strategy.

“It will follow the trend dictated by the market, it may go up or down, and the Central Bank of Costa Rica does not intervene in said trend unless there are violent fluctuations.,” said Luis Diego Herrera, Economic analyst at ACOBO Financial Group.

And Alberto Franco, Economist ar Ecoanalysis, said “Historically this has been a time of higher demand for foreign exchange and that could be repeating again. It does not seem to me that it is a movement that is out of the ordinary in that market”.

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