Costa Rican Central Bank is selling reserves to protect ceiling of exchange rate
The Central Bank (Costa Rican Reserve Bank) increased the sale of dollars to keep the exchange rate within the maximum price for the currency or “roof of the exchange rate band.”
The entity had spoken very little between June and early July 17. In those seven weeks just sold $ 9.8 million to defend the maximum price for the currency. The week before last week, the bank sold $33 million in reserves and last week it sold $37 million.
On the wholesale market in dollars (Monex), the Central Bank offers to sell the dollars required to keep the maximum rate of the exchange rate band (the roof) and they buy the dollars required to keep the minimum price for the exchange rate (the floor). In this way, the entity seeks the price of the dollar remains within the band. The roof of the band is devalued ¢0.20 per day. Yesterday stood at ¢ 590.05. The floor is fixed at ¢500.
The Central Bank President Francisco de Paula Gutiérrez, said on Wednesday when presenting the revision of the “Macro economic plan” in the second half of the year there are usually a greater demand for dollars and therefore is expected to sell more dollars.
Despite the increased sales dollars, the Government Agency plans to end the year with an increase of $150 million in foreign exchange reserves
Source: La Nacion
