Monetary Reserves Fall As Trade Deficit Grows

September 26, 2008

More ominous economic news appeared on the horizon this week for Costa Rica after the Central Bank announced the nation’s trade deficit is worsening, further depleting the bank’s reserves.

With imports rapidly outpacing exports, the trade deficit grew by 91.2 percent over the 12 months ending in August, the financial advising firm Aldesa wrote this week in a daily markets analysis.

The deficit totaled nearly $3.9 billion in August, Aldesa said. While exports last month were up 5.6 percent compared to August 2007, imports had risen 26.7 percent.

With more money leaving the country than entering, the Central Bank’s international monetary reserves have continued to fall as it fights to keep Costa Rica’s colonto-dollar exchange rate within guidelines it set earlier this year (TT, July 25).

Those reserves fell by $48.5 million last week and have now dipped to their lowest level in nearly a year: $3.865 billion.

Based on the average monthly cost of imports from the first eight months of the year, the bank’s reserves cover less than three months’ worth of imports. Covering three months is considered to be a minimum indicator for a stable financial system, according to Aldesa.

–Leland Baxter-Neal

 

You may be interested

Cold front claims fourth victim in Costa Rica
Weather
1779 views
Weather
1779 views

Cold front claims fourth victim in Costa Rica

Katherine Stanley - December 12, 2017

High winds claimed the life of a fourth victim in Costa Rica as the cold front that has been moving…

With Keylor Navas battling injuries, Real Madrid eyes January swoop for Bilbao goalie
Keylor Navas
619 views
Keylor Navas
619 views

With Keylor Navas battling injuries, Real Madrid eyes January swoop for Bilbao goalie

AFP - December 11, 2017

Real Madrid's first foray into the January transfer market will be to snap up Athletic Bilbao's promising goalkeeper Kepa Arrizabalaga,…

Our High Season Print Edition is here! Here’s where to find it
The Tico Times
781 views
The Tico Times
781 views

Our High Season Print Edition is here! Here’s where to find it

Katherine Stanley - December 11, 2017

In the weeks since the relaunch of The Tico Times on Sept. 1, we’ve been hard at work to reconnect…