Costa Rica depreciated its currency 2% in 2009
The dollar depreciated slightly to the Colon during 2009. Thus the reference purchase price for the year ended at ¢558.67, 1.6% above the price the last day of 2008. The reference sale price for the year ended at ¢571.81, 2% over the same period.
The average wholesale price ended the year at ¢561.82, with a depreciation of 1.5% over the same period.
The price of the dollar ended the year close to the center of the trading band. The ceiling of the band ended the year at ¢611.05. That ceiling is the price at which the Central Bank sells the required dollars to meet demand in the wholesale market. So now, the price of the dollar in the wholesale market has room to rise about ¢49.
The floor of the band was maintained throughout the year at ¢500, which creates scope for the dollar can get down at ¢62.
The fact that the Central Bank has not bought or sold currency in the last 20 weeks implies that the price reflected the supply and demand for currencies in the wholesale market. That is one reason why the exchange rate has had more variability in 2009 that now reflected short-term shortages or excesses.
For Central Bank President Francisco de Paula Gutierrez, is difficult to say an equilibrium price of the dollar, however, noted that studies of the entity indicates that the price of the currency could be entering a “a balance”. However, this “balance” may change as economic conditions change.
For 2010 the Central Bank plans to continue with flexibility in the dollar in order to proceed with the implementation of inflation targeting system.
Source: La Nacion
