Has the decline in the dollar exchange rate stopped!?

QCOSTARICA – Over the past few weeks, the price of the dollar has fallen 35 columns from 675.02¢ for the August 1st sale to 639.28¢ on Wednesday August 26th. The purchase went from 667.61¢ to 633.09¢, respectively.

On June 23, the reference rate quoted by the Banco Central (Central Bank) was 698.44¢, while the exchange rate of most banks exceeded 700¢; the purchase was 691.20¢ that day in June. See historical Central Bank exchange rate (tipo de cambio) figures here.

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At the banks, this Saturday morning August 27, the sale fluctuates between 647¢ and 650¢; purchase 632¢ to 635¢. See here the BCCR list of financial institutions and their exchange rates.

It seems that the downward trend of the last week of June, after the Central Bank announced measures to reduce upward pressures, which accelerated in the last two weeks, has come to an end.

The downward trend, experts said, was influenced by falling international commodity prices and lower demand for dollars to pay for overseas purchases. One of the main overseas buyers is RECOPE, the Costa Rican refinery that does not refine anything, putting pressure on demand to keep the country’s fuel tanks full.

To this must be added the approval and disbursement of the $1.1 billion loan from the Fondo Latinoamericano de Reservas (FLAR) – Latin American Reserve Fund.

Economists see a “more stable” behavior of the exchange rate and predict that the dollar will begin to climb again. Some even go so far as to predict an exchange of dollars of nearly 700¢ for one US dollar by the end of the year.

“We believe the exchange rate will remain stable. But there are upward pressures. Especially if the eurobond issue is delayed, which seems to go further towards October. At the moment, what the market is reflecting is the change in the investment strategy of the operators,” Daniel Ortiz, executive director of Cefsa, told La Nacion.

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Economist and founder and consultant of Ecoanálisis, Alberto Franco told the Q that expectations of a recovery in tourism and rising interest rates in colones could be a factor in the correction of the dollar exchange rate, however, predicting the exchange rate in a flexible market is virtually impossible.

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