Colón and Dollar On Roller Coaster Ride

March 19, 2010

Costa Rica’s exchange rate continued its pattern of erratic behavior this week, as the value of the colón appreciated by more than 13 colones against the United States dollar on Tuesday, only to depreciate by 10 colones during Wednesday and Thursday.

The buy value of the exchange rate started the week at ¢536.72 per $1 on Monday, only to fall to ¢523.05 per $1 on Tuesday. The fall of ¢13 in the exchange rate was the largest single-day movement since Nov. 23, 2007, when the colón appreciated by ¢20.

On Wednesday and Thursday, the dollar recovered from its fall, as the buy value moved back to ¢532.99 per $1.

In the first two-and-a-half months of 2010, the exchange rate has fallen from a buy value of ¢558 per $1 in January to Tuesday’s buy value of ¢523 per $1, the lowest figure registered since July 15, 2008. Since August 2009, the colón has appreciated more than ¢60 against the U.S. dollar.

In an interview with The Tico Times last week, Central Bank of Costa Rica (BCCR) President Francisco de Paula Gutiérrez explained the recent fluctuations in the exchange rate and appreciation of the colón. (See story, Page 10)

–Adam Williams

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