The exchange rate of the dollar in Costa Rica currently stands at approximately 507 colones, with experts predicting that an “abundance of liquidity” will persist throughout 2024, making significant upward pressure on the exchange rate unlikely.
During the final two months of the year, the foreign exchange market traditionally experiences a seasonal flood of dollars. Economic and financial specialists emphasize that multiple factors, including Christmas bonus payments, taxes, high tourism season, foreign investment, and exports, could drive the dollar exchange rate close to the ₡500 per unit mark by year’s end.
“Our market is uncompetitive, dominated by seasonal factors that impact companies’ operating flows in terms of foreign exchange supply,” explains Adriana Rodríguez, General Manager of ACOBO Puesto de Bolsa. She further notes that the last quarter of the year typically sees increased foreign currency sales for various obligations, including Christmas bonuses, road tax (marchamos), and other payments in local currency, while most economic activity continues to generate revenues in dollars.
Financial experts maintain a consensus that no visible pressures are likely to push the currency upwards, with predictions placing the exchange rate between ₡510 and ₡530 by the end of 2024. This outlook has drawn mixed reactions from different economic sectors.
“Dollar debtors and importers will be happy, but other sectors will be concerned as it affects Costa Rica’s competitiveness, foreign investment, tourism, and exports,” says Gerardo Corrales, economist at Economía Hoy.
Tourism Industry Raises Red Flags
The National Chamber of Tourism (CANATUR) has voiced significant concern over the current dollar exchange rate level in Costa Rica. According to the organization, the present values threaten the stability and sustainability of their member companies, particularly during a period when businesses face additional operational costs.
“The current exchange rate creates a financial gap that prevents offsetting losses due to exchange rate differentials, putting companies’ stability at risk,” states Shirley Calvo, Executive Director of CANATUR. The organization emphasizes that the colón’s appreciation has a dual negative impact: it affects both the operational stability of tourism businesses and international tourists’ spending capacity in the country.
CANATUR’s concerns highlight the broader implications of currency fluctuations on Costa Rica’s tourism sector, a crucial component of the national economy. The organization has called for government intervention to address these challenges, particularly as businesses navigate through periods of increased operational expenses.
The situation presents a complex economic scenario where the stable exchange rate, while beneficial for some sectors, poses significant challenges for others, particularly those dependent on international tourism and export activities.
