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Central Bank will allow the dollar reduce down to a 4%

The Central Bank last night agreed to modify the limits of the exchange rate bands, bringing the price of the dollar against the colon. This could get off as much as 4% in the coming days.

The board directors of the Central Bank endorsed to establish from today an exchange rate intervention ¢ 498.39 on the purchase of the American currency.

This means a reduction of about ¢ 20 against the value of buying the dollar, fixed ¢ 519.16, since last January 27.

The Central Bank also found that the value of the purchase is devalued in ¢ 0.06 per day.

Meanwhile, the exchange rate was fixed selling intervention, as from today, ¢ 562.83 and will be raised by ¢ 0.06 a day.

The sale had been increasing since last January, at a rate of ¢ 0.11 per day.

With the measure, the Central Bank seeks to control the inflation in the medium term and have greater leeway in the implementation of monetary policy.

This way it won’t have to intervene in the foreign exchange market so often.
When Central Bank purchases dollars in the foreign exchange markets (known as Monex) they must issue colons, which generate inflationary pressures.

This adjustment in the system of bands is the second that applies in the Central Bank since its implementation in October 2006.

Some banks reacted immediately and announced the lower limit of the exchange rate band.

The objective of this measure is to prevent those with US dollars to go and sell them in the market with that price to the bank, because it is going to lose, concurred separately Carlos Fernandez, manager of the Costa Rica Bank, and Gerardo Corrales, executive vice president of the BAC Group.

Fernandez explained that the big winners with this measure are those who have dollar credits and now must spend fewer colons to buy that currency and make their payments. Also importers, who also spent fewer colons to make their purchases in dollars.

Otherwise happens with the exporters, which are becoming the big losers, he added.