Costa Rica is a small Central American country known for its natural beauty, biodiversity, and tourism industry. The Costa Rican economy has been affected by various internal and external factors in the last 12 months, including the COVID-19 pandemic, political instability, and international economic trends. One of the most significant indicators of the country’s economic health is its exchange rate. In this blog, we will discuss the Costa Rican exchange rate in the last 12 months and the factors that influenced it.
The Costa Rican Colon (CRC) is the official currency of Costa Rica. The exchange rate of the CRC against the US dollar (USD) is the most commonly used indicator to measure the country’s economic stability. In the last 12 months, the exchange rate of the CRC has been influenced by several factors, including:
COVID-19 Pandemic: The COVID-19 pandemic has affected the global economy, including Costa Rica. The pandemic has led to a significant decrease in tourism, which is a major source of foreign currency for the country. This has put pressure on the exchange rate of the CRC. The Central Bank of Costa Rica (BCCR) has intervened in the currency market to prevent sharp fluctuations in the exchange rate.
Political instability: Political instability has been a major issue in Costa Rica in the last 12 months. The country has had three different presidents during this period, which has created uncertainty and volatility in the markets. This has had an impact on the exchange rate of the CRC.
International economic trends: The exchange rate of the CRC is also influenced by international economic trends. The US Federal Reserve’s decision to reduce interest rates and inject liquidity into the markets has put pressure on the exchange rate of the CRC. The appreciation of the US dollar against other major currencies has also had an impact on the exchange rate of the CRC.
Now let’s take a closer look at the exchange rate of the CRC in the last 12 months.
On February 25, 2022, the exchange rate of the CRC against the USD was 622.56. This was an increase of 0.27% compared to the exchange rate on February 25, 2021, which was 624.22. The exchange rate fluctuated throughout the year, reaching its highest point on May 10, 2021, when it was 620.51, and its lowest point on October 29, 2021, when it was 695.62.
The BCCR has intervened in the currency market to stabilize the exchange rate of the CRC. The bank has sold USD in the market to increase the supply of CRC and reduce its value. It has also bought CRC in the market to reduce the supply and increase its value. The BCCR has also used other measures, such as adjusting interest rates, to influence the exchange rate of the CRC.
In conclusion, the exchange rate of the CRC in the last 12 months has been influenced by various factors, including the COVID-19 pandemic, political instability, and international economic trends. The BCCR has intervened in the currency market to prevent sharp fluctuations in the exchange rate. The exchange rate of the CRC has fluctuated throughout the year, reaching its highest point in May 2021 and its lowest point in October 2021. The exchange rate of the CRC is an important indicator of the country’s economic stability and is closely monitored by investors and analysts.