QCOSTARICA — The recent decline in the dollar exchange rate or appreciation of the colon, has generated challenges for individuals and business owners in Costa Rica who earn income in dollars.
In an effort to offer financial guidance in the face of this exchange rate situation, the Banco Nacional (BN) offers five key tips from its exchange rate specialists at the Finance Directorate, with three suggestions for employees and two for entrepreneurs:
“To face exchange rate volatility, it is essential to protect debts as well as expenses in the same currency as income to generate stability in your personal budgets. It is also important to avoid financial speculation. On the other hand, for entrepreneurs, it is recommended to analyze acquiring exchange hedges to cover their financial flows and take advantage of favorable moments to build liquidity reserves. These strategic measures can help mitigate exchange rate risk and guarantee greater financial stability for people and companies,” explained José Antonio Vásquez, Finance Director of the Banco Nacional.
– Advertisement –
Main recommendations
For employees
- Protect your debts in the currency of your income: It is generally recommended that debts be denominated in the same currency in which the income is received, both for those who receive their salary in colones and in dollars.
- Convert your salary to colones: For those who receive their salary in dollars, it is suggested that you explore the possibility of requesting your employer to convert your payment to colones. Many companies, recognizing the appreciation of the colon, are taking measures to protect the purchasing power of their employees.
- Be cautious in speculation: At this time, it is uncertain when the decrease in value will start to increase again. The tactic of purchasing assets at a low price and then selling them at a higher price may not be successful, potentially resulting in financial losses in the near future.
For businesses:
- Acquire currency coverage: Both exporting and importing companies can benefit from purchasing currency coverage offered by financial institutions. These hedges allow you to fix a future exchange rate, which provides stability and security, since it allows you to do better financial planning in your cash flows.
- Take advantage of the favorable moment to save: It is essential that entrepreneurs take advantage of the periods in which the exchange rate favors them to generate savings that allow them to face future fluctuations. Whether to withstand an eventual depreciation of the colon or prepare for possible appreciations. Strategic savings can strengthen the financial position of companies to build liquidity reserves.
Source: RevistaSumma.com
– Advertisement –
Source link
Q Costa Rica
