Another factor that influences the exchange rate is MONEX, the public money market on which currency is traded. Lately, the erratic fluctuations in the exchange rate have raised concerns that if people trading currency on the MONEX market could predict the fluctuations in the exchange rate, they could manipulate the bands system to turn a quick and easy profit.
The exchange rate has moved in a downward trend over the past few months but, in the midst of that predictable movement, there have been unusual movements in which the exchange rate depreciated at a dramatic 5-colones clip, only to continue appreciating in the following days.
For example, between Feb.11 and 12 there was a dramatic change in the exchange rate. On Feb. 11, the buy value of the exchange rate was ¢551.78. On the 12th, the buy value was at ¢545.05.
Though the over ¢6 colones fluctuation seems an insignificant amount, if someone were to buy colones with dollars on MONEX on the 11th, the colones would be more valuable on the 12th. If a large number of colones were purchased, for example $100,000 worth, on the 11th, the buyer would receive¢5.517 million. If the buyer elected to sell the colones the following day when the colon appreciated, a profit of ¢673,000, or about $1,200, could be turned.
“It’s possible that some of the bigger companies and wealthier organizations could attempt to do this in response to the recent volatility in the exchange rate,” Tomaya said. “It is a risk, some of the bigger participants in the market could technically attempt this.”