Who hasn't been hit when the dollar starts to fluctuate dramatically? In the middle of last year, the sale price of the dollar exceeded 700 colones at the windows of all the banks in the country.
Then, thanks to some measures by the Central Bank, such as the issuance of financial instruments in dollars as an additional option for savers, in addition to the request for a $1000 billion loan from the Latin American Reserve Fund (FLAR), to reinforce the reserves of this currency. in the country, the dollar began to fall. And in recent weeks it has recovered its value.
This seriously impacts the country's economy and personal finances and Costa Rican households:
- Those who have debts in dollars, but receive income in colones must allocate a much higher percentage of their budget to pay the monthly fee.
- Some people may be forced to lose properties because they have no way to continue paying interest in dollars.
- Other people or companies prefer not to make certain investments or businesses due to high costs or fear of future prices.
Hence, it is important to understand some reasons why the dollar can fluctuate:
- Seasonal factors. There are times of the year when the demand for buying and selling dollars varies considerably due to natural market movements. For example, between September and January it may change due to the number of people shopping for Christmas or school supplies due to the start of the school year, increasing imports.
- High import costs. This is an easy way of explaining it, but the post-COVID-19 container crisis demonstrated that the costs of importing products, especially from one continent to another, significantly affect the cost of living for consumers and thus impact the dollar exchange rate. Hence, it is also essential that certain industries have local suppliers and that the majority of final customers choose nationally produced brands.
- Inflation of allied countries. If price levels in the countries with which Costa Rica trades rise, so does the need for dollars. And the higher the demand, the higher the exchange rate.
- International price of fuels. It has already been more than demonstrated that this is a condition that increases the demand for dollars, and also affects the price of the gasoline that we use to produce or transport ourselves.
- Speculation effect. Given the drastic changes in the exchange rate and the uncertainty of economic agents, some organizations or people buy dollars to protect their money and that also causes the currency to fluctuate.
If you need advice on what type of credit It favors you more, if in dollars or in colones, or make a consolidation of debts to face the changes in the cost of the dollar, contact us immediately.