Saturday 9 December 2023

Dollar exchange expected to remain low for the rest of the year and close at ¢550

Entry of Eurobonds and brake on interest rates will keep the dollar cheap

Paying the bills


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Dollar Exchange

¢526.96 BUY

¢533.11 SELL

9 December 2023 - At The Banks - Source: BCCR

Paying the bills


QCOSTARICA — If you have debts in dollars you can rest easy and if you want to make investments it is a good time to do so since the price of the U.S. dollar in Costa Rica is expected to remain low for the rest of the year and close the year in the range of between ¢550 and ¢560.

Basically, the government was able to attain financial stability, meaning it did not need to inject money into the internal markets or increase interest rates. Furthermore, this was supplemented by the influx of dollars generated by Eurobonds and external loans.

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“It is possible that the arrival of a large amount of dollars into the State coffers will cause this to be transferred to the rest of the financial market and therefore, the exchange rate will remain low,” said Daniel Suchar, financial analyst.

The decline in the dollar also leaves losers: exporters, industrialists and the tourism sector who are crying out for the dollar exchange to rise, to protect investment and jobs that depend on profits in that currency.

So far this year, the exchange rate has appreciated 22% and the projection is that neither Christmas nor the end-of-the-year holidays will be able to raise its dollar price.

The outlook could change if there is a greater rebound in the tourism sector and exports, the additional arrival of foreign direct investment, speculative capital and the Central Bank using its tools to keep inflation under control.

This generates five benefits for consumers: first, they can take advantage of the decrease in price of the dollar and buy the currency at a lower cost to meet commitments and thereby reduce expenses.

In addition, it is recommended that if you make purchases of goods and services with credit cards, you must ensure that you have the budget in colones to purchase dollars in the future.

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4 aspects that could change the projection

There are circumstances that could vary the forecasts, according to Vidal Villalobos, Economic Advisor at Grupo Financiero Prival, and among them the following stand out:

  • The reduction in the premium for investing in colones that makes investment in dollars attractive again.
  • The increase in the price of raw materials, especially fuels.
  • The movements in international interest rates
  • The cyclical and recurring interest of large market participants in seeking a depreciation of the exchange rate towards the end of the year for accounting reasons.

“You can search in the financial system for investment options in dollars so that the resources you have are profitable to increase their value and if you have old balances on credit cards in this currency, buy dollars and pay these considering that, the value to date is quite low and this saves a lot of money,” said Elizabeth Morales Rivera, deputy manager of Coopecaja.

Another aspect that shows that this indicator will not change is that several weeks ago a floor was placed in the wholesale market of approximately ¢540 and in addition, there is a decrease in the supply of dollars.


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Paying the bills
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