Post by rabia336 on Feb 20, 2024 5:39:54 GMT -5
Colones per dollar and now in February it slightly exceeds colones By Editorial The Observer Reading Time: minutes Exchange rate, job destruction and productive activity Facebook Twitter WhatsApp Telegram Listen to article In mid-, the exchange rate approached colones per dollar and now in February it slightly exceeds colones. What has caused this behavior in the last months? How much has fiscal, monetary and exchange rate policy influenced this result? The real economy. There are real factors of the economy (growth in exports, lower prices of imported goods and greater attraction of foreign direct investment) that have contributed to reducing the external gap and fueling the abundance of dollars in the national economy in the last months, compared to the first half of , which was marked by the crisis of Russia's invasion of Ukraine and the logistical difficulties of international transportation.
Fiscal policy. The Central Government has increased the external financing of its deficit by placing bonds abroad (, million dollars in ) and with loans from multilateral entities (IMF, IDB, World Bank, CABEI). Although it is true, the government has amortized external debt, in net terms it has had a positive flow of external financing that has co America Cell Phone Number List ntributed to the abundance of dollars. Monetary and exchange policy. The BCCR claims to follow an inflation goal by modifying the monetary policy rate (MPR). Despite the negative inflation observed for several months (the goal is percent) and that inflation expectations are aligned with said goal, the BCCR continues to maintain a MPR above the value considered “neutral.” That is, the BCCR has not reduced the MPR sufficiently.
To be consistent with its announced monetary policy. Why this behavior of the BCCR? It may be due to incompetence (the doctor has not known how to withdraw the medication at the right time and the patient dies from an overdose) or because there is an unexpressed objective of avoiding devaluation of the colon through a higher MPR than necessary to achieve the goal of inflation. It should be said that the BCCR with its monetary policy of excessive interest rates in colones has encouraged the abundance of dollars, either because more come in from abroad (or leave less) or because within the country the holders of dollars transform them into colones in the country. exchange market. The BCCR has purchased many millions of dollars to avoid a further decrease in the exchange rate. But the most sensible thing would be to have a monetary policy consistent with its inflation goal that does not generate exchange rate appreciation.
Fiscal policy. The Central Government has increased the external financing of its deficit by placing bonds abroad (, million dollars in ) and with loans from multilateral entities (IMF, IDB, World Bank, CABEI). Although it is true, the government has amortized external debt, in net terms it has had a positive flow of external financing that has co America Cell Phone Number List ntributed to the abundance of dollars. Monetary and exchange policy. The BCCR claims to follow an inflation goal by modifying the monetary policy rate (MPR). Despite the negative inflation observed for several months (the goal is percent) and that inflation expectations are aligned with said goal, the BCCR continues to maintain a MPR above the value considered “neutral.” That is, the BCCR has not reduced the MPR sufficiently.
To be consistent with its announced monetary policy. Why this behavior of the BCCR? It may be due to incompetence (the doctor has not known how to withdraw the medication at the right time and the patient dies from an overdose) or because there is an unexpressed objective of avoiding devaluation of the colon through a higher MPR than necessary to achieve the goal of inflation. It should be said that the BCCR with its monetary policy of excessive interest rates in colones has encouraged the abundance of dollars, either because more come in from abroad (or leave less) or because within the country the holders of dollars transform them into colones in the country. exchange market. The BCCR has purchased many millions of dollars to avoid a further decrease in the exchange rate. But the most sensible thing would be to have a monetary policy consistent with its inflation goal that does not generate exchange rate appreciation.