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Costa Rican exchange rate to hold steady near future

Friday, October 12, 2012

The flood of dollars into Costa Rica will accelerate in 2012 and 2013.

The Central Bank administers the exchange rate using “bands”: floor and ceiling rates that will trigger the market to buy or sell dollars to maintain the rate between the bands.

Currently, the very relevant lower band stands at 500 to the dollar, which the central bank can sustain easily into 2013. But if nothing happens to reduce the flow of dollars into Costa Rica, that rate could come under downward pressure next year.

Source: Tico Times