Ticos, with an abundance of export and tourism dollars

The Central Bank of Costa Rica (BCCR) assured this Monday that export growth and a recovery in tourism, among other factors, are causing an abundance of dollars and appreciation of the local currency to levels not seen in a decade, prompting complaints from manufacturing sectors.

“Costa Rica’s economy was richer in dollars because of exports and tourism,” said BCCR President Roger Madrigal at a press conference where he addressed the state of the dollar exchange rate.

According to official data, the 202nd year3 tourism increased by 16.9% and export of goods 15.5%.

Other factors Madrigal points to are less demand for dollars from pension operators and an increase in foreign direct investment.

The dollar reached its peak on July 1, 2022, when it traded at 693.69 colones, but since then it began to decline until it settled at 516.86 at the end of January 2024, representing a variation of 25%.

This Monday the dollar is trading at 518.28 columnsaccording to the reference exchange rate of the Central Bank.

Faced with this situation, productive sectors such as coffee farmers, the banana industry, the National Tourism Chamber and others, have asked the central bank to act to mitigate the decline of the dollar against the colon, as their competitiveness is threatened by having income in dollars and costs in columns

The president of the central bank said this Monday that the entity intervened in the market to prevent further decline of the dollar and increase its international reserves.

Illegal money?
The general secretary of the trade union National Association of Public Employees (ANEP), Albino Vargas, assured in a recent opinion piece that there is a “public secret” about the “flows of money resulting from the activities of organized crime and drug trafficking” that are in the foreign exchange market.

Vargas referred to the “other” item used in the market classification and stated that the daily average of money classified this way was about $15.7 million during 2023.

President of Central bank announced this Monday that the entity will order, starting in April, banks advertisements provide more detailed information to identify the people who buy and sell dollars, as well as the activity for which that money is used.

Foreign exchange transactions are classified into a catalog of 29 options that include some like export and import, and “other” is used when the movement does not fit any of the options.

According to Central Bank data, “other” represented 48% of origin and 47% of destination of transactions between 2017 and 2023.

The president of the Central Bank admitted that there is room for improvement to better determine the origin and destination of money from the “other” category, but insisted that the entity “does not favor laundering from any source.”

Madrigal emphasized that the money that passes through foreign exchange market of the Central Bank It has already passed through the filters that banks are required to apply under the law on the prevention of money laundering.