Are We Being Played? The average price of the dollar in the wholesale market dropped ¢19.5 colones this week, while the Central Bank (Banco Central) reserves also continued to fall.
The drop in the price of the dollar was influenced by a greater supply of the foreign currency in the transactions from Monday to Wednesday at the commercial banks.
In those three days the intermediaries bought US$230 million dollars from the public while they sold US$184.4 million; that is, there was a greater offer from the public, than demand.
There was one day in particular, on Wednesday, November 14, in which the purchases of intermediaries from the public reached US$108 million, and sales US$63.7 million.
The buy/sell reference rate posted by the Central Bank for today is ¢597.26 and ¢604.76.
Last Saturday, the buy/sell reference rate was ¢616.96 and ¢623.71. A few days (Nov. 7) earlier it reached the peak of ¢622.99 and ¢631.30.
On October 18, the reference rate for the buy was ¢590.33 and ¢595.81 for the sell. See the reference rate for the last 30 days here.
This morning, November 18, the ranges at the banks is ¢593 to ¢595 for the buy and ¢607 to ¢610 for the sell. See the latest exchange rates at banks here.
Eduardo Prado, manager of the Central Bank, explained that in our exchange market there are many factors that affect the purchase and sale of foreign currency, and it is not possible to identify all those that contribute to the results observed on a given day.
However, he added, there are, among these factors, certain seasonal patterns or behaviors that manifest themselves with some regularity, for example, a greater influx of dollars is usually observed at the exchange intermediaries at close to the end of the first quincena (15th) of each month, related to companies that change dollars to colones for the payment of salaries and social security contributions.
When the financial intermediaries have a surplus of currencies they are generally going to sell them at the Monex (wholesale money market) and thus there was a greater supply that contributed to the reduction of the price of the currency, without the need for strong direct intervention by the Central Bank.
Directly to stabilize the market, the Central Bank sold US$400,000 this week, well below the US$86 million it sold last week.