Costa Rica's
Central Bank To
Move To A
Floating
Exchange Rate To
Stabilize The US
Dollar
The exchange
rate band system
that is used to
the fix the
price of the
dollar will
cease to apply
in the country
as the Banco
Central de Costa
Rica (BCCR) -
the Central Bank
- moves to a
"managed float"
system.
That was the
announcement
yesterday by the
Central Bank's
new president,
Rodrigo Bolaños,
during a press
conference,
which, until
recently the
head of the
bank, Francisco
de Paula
Gutiérrez, took
the opportunity
to announce his
retirement after
seven years
leading the
monetary
policies of the
country, handing
over to his
successor the
sawdust, nails
and screws of
the bank.
Jokingly,
Gutiérrez told
Bolaños that the
most dangerous
of the bank was
the sawdust of
the sawing of
the wooden
floors, while
the nails and
screws are the
problems to come
along the way.
"The major
challenge is to
find ways to
consolidate the
move to a
floating
exchange rate
and to
consolidate
inflation to one
one digit and
not the current
10% to 15%
range", said
Bolaños.
The new bank
president said
that from a
certain point of
view the system
of band met its
objectives of
the Central Bank
at the time,
maintaining
interests rate
and inflation
low and
controlling the
amount of money
in circulation.
However, this
system (bans) is
also responsible
for so much
fluctuations in
the price of the
dollar, which
needs to be
stabilized.
Bolaños did not
say when the
change will
occurr, for the
bank's board of
directors have
yet to establish
the rules of the
intermediation.
"With the
managed float
system, the
Central Bank
wants to
consolidate its
control so that
it can fulfill
its inflation
targets", said
Bolaños.
Outgoing
president,
Francisco de
Paula Gutiérrez,
highlighted
yesterday his
main achievement
of his term in
achieving a low
inflation rate,
but regretted
not being able
to change the
bank's process
of intervention. |
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