Thursday 9 February 2023

Dollar exchange rises sharply in the last week

The rise in the last 10 days follows the trend reported in recent months due to the increase in the cost of raw materials imported by Costa Rica and increases the pressure on the demand for the international currency, among other factors

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Dollar Exchange

¢577.12 Buy

¢586.15 Sell

8 February 2023 - At The Banks - BCCR

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QCOSTARICA – An increase of almost 8 colones in the dollar exchange was registered during the last week, in another turn to the depreciation trend of the local currency motivated above all by international factors.

This Wednesday morning the sell rate for the dollar exchange reached ¢662 at some banks
Country

The sell price published by the Banco Central (Central Bank) this Wednesday morning, March 9, ¢655.61 and the buy ¢648.97 for one US dollar.

On March 1, the Central Bank reference rate was ¢647.31 for the sell and ¢640.02 for the buy. See here.

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At the State banks, all post the sell at ¢661, and ¢647.50 (BCR, BN) and ¢648 (Popular) for the buy. At the private banks, the buy ranges from ¢658 to ¢662 and sell from ¢640 to ¢646. See here the exchange rate at banks.

The hike in the exchange rate is due to an increase in the price of raw materials on international markets and its impact on the demand for foreign currency to be able to acquire it.

This is related to the pressure that the war in Ukraine causes on oil prices, although the increase in fuel prices has already been accumulating for several months, which explains the trend of the dollar becoming more expensive for Costa Rica, warned economist José Luis Arce, an analyst at the firm FCS Capital.

“We are not talking about a new factor. This has been reflected in the (country’s) oil bill and its effect on the exchange rate, in addition to the fact that we are coming from a year of growth in the economy (after the pandemic), which causes an increase in the volume of imports of raw materials,” Arce explained.

Another factor that influences the dollar exchange, commented the economist, is the permanence of low levels in interest rates in colones, which makes savers look for options in dollars and this additionally increases the pressure on the demand for that currency.

Arce downplayed the seriousness of last week’s increase and prioritizes the trend of recent months, since in November the dollar had also climbed and in December it fell again.

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For the immediate future, Arce expects the upward trend of recent months to continue, since it largely depends on the prolongation or intensification of the armed conflict in Ukraine, although it is not the only element.

“The market shows no signs of stress, the Central Bank has not intervened (withdrawing dollars to lower its price). Of course, there is pressure, but there is no local overheating,” added Arce.

The economist coincided with warnings from economic authorities about the rise in the cost of living as a result of the repercussions of the price of raw materials, with pressure for a rise in inflation, as was already reported Monday morning with a year-on-year increase indicator of 4 .90%, the highest in seven years.

 

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