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La Nacion – 5:28 a.m.VIERNES 23 DE SEPTIEMBRE DEL 2011
Situación financiera externa amenaza el precio del dólar
Techo de las bandas se acerca a ¢700
I don’t think this will be GOOD NEWS for everybody, besides it states “las bandas” or there is a 200 colones spread from 500 to 700 could occur in the next few months.
Thing is “El Banco Central” will not allow this to happen. I can see an exchange rate of 1 to 525 in the near future but not reaching 700. If it gets out of hand they will AUTO correct it
The 700 figure would mean CR exports would receive less and the imports cost more by 40% MORE an devaluate the salary of every one by that amout.
The Government has come with some more Tax ideas that are more efficient like a $600.00 fine for speeding on a 60K road and doing 80K. And with any active corporation making any income in CR paying taxes.
CR is actively increasing their Tax collection system since 50% are not reporting their fair share of income and we are not talking about the “PULPERIA” around the corner.
The markets are in a turmoil right now and all of this is speculation.
I see the La Nacion article you are referring to Tom but would you like to expand on your comments at all?
quote=”crhomebuilder”]La Nacion – 5:28 a.m.VIERNES 23 DE SEPTIEMBRE DEL 2011
Situación financiera externa amenaza el precio del dólar
I fail how this news is good news for anyone. Maybe someone can enlighten me.
[quote=”crhomebuilder”]When you go to exchange dollars for colones, you will receive more colones per dollar.[/quote]
Please excuse my ignorance but doesn’t this devalue the colon vs. the dollar?
Yes it would Rw but there would be other consecuences also like a higher inflation rate for the country.
The less avilability of the dollar makes the rates GO UP and the more means DOWN.
Even when the US had a 12 trillion deficit and where printing more $$ the colon was averaging 500. Now with a 14.5 trillion debt in the USA the colon is at about 506. Even with a DOWNGRADE from “AAA to AAb”
“El Banco Central” can adjust the rate by buying dollars or selling them and keeping what they call “las bandas” (exchange rates) between 450 and 550 and NOT 500 and 700.
A major advantage CR has is the amount of $$ they get from tourism. This is an influx of capital that does not cost them a dime compared with exporting their products, IE. Disney World, Royal Caribbean cruise and other industries that do this.
Expect, plan and budget your expenses on a 1 to 500 rate exchange because anything else is a PIPE dream.
It appears the Costa Rican Central Bank wants to emulate the US devaluation of its currency. Perhaps they expect a devalued Colon will stimulate exports and they need to goose the economy along. I have to wonder, though, how far this will go since the US dollar is on a straight path to extinction. Who knows what is really going on behind the closed doors of these central banks?
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