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Where is the exchange rate heading in Costa Rica?

Tuesday, October 16, 2018

By the end of the year, the Costa Rican exchange rate is likely to be running at 590 to 600 colones to the US dollar, following a period of volatility that was marked by ups and downs in August.

Costa Ricans have to become accustomed to currency risks and price volatility because that is how the current system of a managed currency float works. The market establishes the currency's value, which is why it floats, but the central bank tweaks the flotation to avoid ups and downs.

The colón has been devalued by 9 percent so far in the second half of the year, but for so far the whole of this year is has fallen by 5 percent, though experts reckon that the figure is likely to be 6 percent by year-end.