QCOSTARICA — The dollar exchange continues downward, on Monday, trading below ¢500 colones to one US dollar at some banks.
However, this is not because the Banco Central (Central Bank) has not taken action, assured Roger Madrigal, president of the Central Bank, in his accountability to Legislators.
Madrigal reiterated that the fall in the price of the dollar is due to factors such as the recovery of tourism, exports, and direct foreign investment.
He denied that there is a direct mandate from the president of Costa Rica, Rodrigo Chaves or Nogui Acosta, Minister of Finance, to control the price of the dollar.
“There is great autonomy from the Central Bank and the price is regulated by market rules,” he said.
The legislators, Paulina Ramírez and Andrea Álvarez assured that monetary policies are affecting the productive sectors and that it is necessary to find a balance.
Madrigal assured that the salaries paid by companies located in free zones generate a greater supply of dollars in the Costa Rican economy.
“In 2023, the companies in the special regime paid their workers US$4.83 billion, that is, 65.7% of the surplus generated over the counter by banking entities during the last year,” highlighted Madrigal.
The fall in the price of the colon against the dollar is causing a slowdown in the economy, loss of employment, and competitiveness, said the representatives of three business chambers, which has requested action from the Central Bank.
The first is the Cámara de Servicios Corporativos de Alta Tecnología (CamSCAT) – Chamber of High Technology Corporate Services, which brings together more than 80 multinational companies; This is followed by the Cámara de Tecnologías de la Información y Comunicación (Camtic) – Chamber of Information and Communication Technologies, which represents more than 180 national and multinational companies dedicated to the development of technology, and finally, the Asociación de Empresas de Zonas Francas (Azofras) – Association of Free Zone Companies, which houses almost 500 export companies.
“The BCCR has had inflation control as its main objective, which has already been met, since according to OECD data, comparative by country, Costa Rica closed 2023 with -1.8% inflation, its goal being 3% with +/- 1% variation. However, inflationary control is generating a high social cost and loss of competitiveness,” said Carlos Wong, president of Azofras.
The exchange rate is causing Costa Rica to have the highest minimum wage compared to the U.S. dollar in all of Latin America, generating great competitive disadvantages with other countries.
For example, in Costa Rica, the minimum wage is 20.5% higher than in Uruguay, 32% higher than in Chile, 56% higher than in Mexico (one of Costa Rica’s main competitors in manufacturing), and 105% higher than in Colombia, a competitor in manufacturing, corporate services and technological.
The free zone regime, which on average contributed 20,000 net jobs annually during the 2020-2022 period, as of December 2023 only reached 5,506, which represents a drop of 73%.
On Tuesday, Costa Rica’s vice president, Stephan Brunner, declared that some export companies will have to reconsider their activity if they are not profitable with the current exchange rate.
The statement was made in defense of the downward trend in the dollar exchange.
