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Friday, February 23, 2024

Costa Rica Exchange Rate Hits 9-Year High Versus US Dollar 

On Wednesday, December 6, Costa Rica witnessed a significant dip in the dollar exchange rate, hitting its lowest since February 2014. The weighted average in the Foreign Exchange Market (Monex) settled at ¢531.13.

The trading session on Wednesday saw over $132 million in transactions, marking the highest volume for the year, with 272 exchanges taking place.

Public banks displayed varying rates for dollar sales: Banco Nacional at ¢534, Banco de Costa Rica (BCR) at ¢535, and Banco Popular at ¢536. Other banks offered rates between ¢537 and ¢540.

The Central Bank of Costa Rica (BCCR) attributes this rise in the colón’s value to an excess of dollars within the country. This increase is partly due to the resurgence of the tourism sector, progress in exports, and direct investment inflows. The BCCR’s latest Monetary Policy Report describes the situation as one with “high foreign currency availability.”

At the start of 2023, the first session in the Monex valued the dollar at ¢596.10, indicating an appreciation of nearly 11%. The report also notes a similar appreciation trend in other Latin American countries’ currencies. Concerns were voiced by the Costa Rican business sector on Wednesday morning about the impact of the colón’s appreciation on the financial health of companies and national competitiveness.

Rubén Acón, President of the National Chamber of Tourism (CANATUR), suggested an ideal exchange rate would be between ¢540 and ¢550. However, most business leaders anticipate the rate will likely stabilize between ¢520 and ¢540 by year-end.

This outlook is based on a survey conducted by the Costa Rican Union of Chambers and Associations of the Private Business Sector (Uccaep), which was released on the same day.

Both UCCAEP and CANATUR, along with the Costa Rican Chamber of Commerce, reiterated their concerns on Wednesday morning about the continued financial challenges faced by companies due to the strengthening of the colón, echoing warnings issued nearly a year ago.

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