Central Bank steps in to remove upward pressure on dollar exchange rate

QCOSTARICA – The Central Bank (Central Bank) has increased its presence in the foreign exchange market to remove the upward pressure displayed on the US dollar exchange in recent days.

The dollar exchange rate, which had remained between 610 ¢ and 616 ¢ this year on the Monex market, started to rise and rose from 614.23 on April 15 to 619.48 on Wednesday April 18.

This is the average price weighted by the amount traded in the Monex marketplace, where financial institutions sell or buy their excess dollars and where exporters, importers and anyone who trades $ 1000 or more also participate.

– Publicity –

The Central Bank resumed the sale of US dollars on this market this week to reduce pressure on the stock market.

On Tuesday April 27, the Bank sold US $ 2.6 million and on Wednesday April 28, it sold US $ 957,000 as part of sales stabilization operations.

Another tool used by the Central Bank is to reduce the demand for dollars to meet the needs of the public sector.

The Bank sells the currencies it needs directly to public sector institutions and then replaces them with purchases on the Monex market.

– Publicity –

In April, the Central Bank sold nearly US $ 267 million to the public sector, but bought nearly US $ 187 million from Monex.

Where are the upward pressures coming from?

Economist Norberto Zúñiga explained that the most notable change has occurred in the past two weeks, where the private sector’s foreign exchange surplus has shrunk and public sector demand has increased.

“The process has been gradual, but persistent to the point that during this week private supply has experienced a shortage in the foreign exchange market; forcing the Central Bank to intervene by selling 2.6 million US dollars yesterday (27 April) and today (28 April) 1 million US dollars, ”Zúñiga said.

He noted that the lower private supply is partially seasonal, with lower income from tourism standing out.

“The increased demand from the public sector can be attributed to the increase in the oil bill, due in part to greater mobilization, but above all to the rise in international fuel prices,” said the economist.

This behavior of the foreign exchange market has resulted in exchange rate adjustments, which, if they persist, could affect expectations and feedback, with possible impacts on capital flows, Zúñiga added.

– Publicity –

This morning, Thursday, April 29, the Central Bank pegged the buy of one US dollar at 614.73 colones and the sell at 621.67 ¢.

At local banks, as of this morning (which is subject to change throughout the day), state banks – BCR, BNCR, and Popular – are fixing buy and sell at 612 ¢ and 625 ¢.

In private banks, the majors – BAC, Scotiabank, Davivienda – range from 611 ¢ to 626 ¢.

Click here for the quotation by the Central Bank of exchange rates announced at the counter by exchange intermediaries (public and private banks, mutual societies, cooperatives and exchange houses).

– Publicity –

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