Saturday, 31 October 2020

The USD…

Once again it is time to consider the US dollar as the one currency of Costa Rica. This duo currency (USD – Colon) makes no sense right now and for the foreseeable future.

The national colon is outdated and, obviously, cannot be controlled in its global value as the government would want.

A gradual, yet effective change needs to be made in order to avoid the current “liquidity” crisis and the mounting inflation on that which is being imported.

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All that is imported, which are most things including gasoline and bunker fuel and other goods and service to produce elctricity, are paid out in dollars. Meanwhile, the sale of same is in colons.The fluctuation in currency value has resulted in importers to raise the colon sales price accordingly.

Since Costa Rican essentials are price regulated, the likes of ICE (electricity company) has a last quarter recorded loss of ¢33 billion colons and you can guess who will pay for that. The same for gasoline and even beans, a national staple.

At the checkout counter, we are already paying the costs of importation simply because the USD has risen to a level that far outweighs the value of the colon.

Almost everything in this country is sold (or its price based on the exchange rate) on the USD. That includes rents, sales of real estate, cars, and most durable goods not to mention tourist accommodations.

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This is a US dollar economy by osmosis and the sooner our government drops its pride, the sooner we will get out of the humongous national debt which is also in dollars.

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Juan Sebastian Campos
An expat from the U.S., educator and writer in English and Spanish since 1978 with a doctorate in business administrations (DBA) from the United States and Germany. A feature writer for ABC News, Copley Press and the Tribune Group with emphasis on Central America.

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