QCOSTARICA — On Thursday the question was can the dollar exchange drop to ¢500 colones. The answer, a big yes, came this morning.
Although the official exchange rate set by the Banco Central de Costa Rica (BCCR) – Central Bank – for the buy is ¢507.33, several private banks are quoting this morning ¢500 colones for the buy of one US dollar, while the state banks are quoting ¢502.
This is the fourth consecutive day that the US dollar exchange hits a new minimum in 2024.
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The last time we saw these numbers was back in January 2014, that is a decade ago.
The questions today are, can it go lower? And how far down can it go?
As to the sale of the dollar, at banks (state and private), this morning ranges between ¢516 and ¢521.
Persistent abundance of dollars in Costa Rica
One of the reasons for the drop in the dollar exchange is the persistent supply of dollars. Consequently, with the appreciation of the local currency, the US dollar loses value.
According to the BCCR, this abundance of dollars responds to the “success” that Costa Rica has had in activities related to the generation of the US currency, such as:
- the attraction of multinational companies or attraction of Foreign Direct Investment (FDI)
- greater exports of products and services from Costa Rica to other parts of the world
- greater generation of foreign exchange by the national tourism industry
However, the “word on the street” that many choose to believe, is that the surplus of dollars is linked to drug trafficking, contrary to the official Central Bank rhetoric.
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Read more: Central Bank announces controls to identify source of U.S. dollars
The surplus of dollars in Costa Rica is not new. Since 2022, a constant depreciation of the US dollar has been reported, although with increasing intensity.
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