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

 

Facebook Comments

You may be interested

The Tico Times Weekly Digest: Oct. 15, 2018
Tico Times Weekly Digest
787 views
Tico Times Weekly Digest
787 views

The Tico Times Weekly Digest: Oct. 15, 2018

The Tico Times - October 15, 2018

In this week's episode of the Weekly Digest, a wrap-up of last week's heavy rains, plus more news from around…

Guatemala Fuego eruption is over: officials
Guatemala
850 views
Guatemala
850 views

Guatemala Fuego eruption is over: officials

AFP - October 15, 2018

The most recent eruption of Guatemala's Fuego volcano ended Saturday, an official source said, with locals escaping a repeat of June's…

October in Costa Rica: when the Caribbean comes a’callin’
Pic of the Day
1278 views
Pic of the Day
1278 views

October in Costa Rica: when the Caribbean comes a’callin’

The Tico Times - October 15, 2018

Costa Rica's Caribbean coast is famously exempt from many of the typical weather patterns in the rest of the country.…