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Next Central Bank President
Criticized By Importers
It's been less than 24 hours since Rodrigo
Bolaños was named the new head of the Banco
Central de Costa Rica (BCC), the Central
Bank, taking office on June 15th and already
the flood of critics has begun.
Bolaños, who will be replacing Francisco de
Paula Guttierez, was named on Thursday by
president-elect Laura Chinchilla. And on
Friday a group of Costa Rican importers
began sending him the message of their
discontent with the current situation with
the exchange rate.
The Cámara de Comercio Exterior y de
Representantes de Casas Extranjeras (Crecex)
has already given president-elect Chinchilla
notice of their position, detailing five
major points that the new president must
face once she takes office and deemed
urgent, they now have whom to head up to get
their point across,
"The productive sector requires an exchange
system that creates certainty and security
to create jobs, wealth and development" said
Crecex executive director, Luis Fernando
Monge.
Monge went as far to say that Bolaños has
started on the wrong foot with the
importers, but he hopes that the new Central
Bank president will hear them out in the
future.
"We are concerned that such a violent
fluctuation occurs in the exchange rate.
It's not that we don't believe in the system
of bands, but we would like to have more
certainty. Importers like when the dollar is
low, like now, by then it will go up
drastically one week, then down another",
said Monge.
The concern by Crecex and others is the
uncertainty of the policy of the new
government coming on May 8.
On Tuesday, ahead of the Bolaños
appointment, president-elect Chinchilla said
the her government would eliminate the bands
and move to a floating market. However, on
Thursday, Chinchilla confirmed the Bolaños
intention to keep the bands in place.
Although the "mini devaluations" may not be
the answer either, many like Monge, miss the
days when.
Monge added that the mini devaluations was
trusted, one could make projections based on
the exchange rate and offered greater
certainty in transactions.
The system of bands for the exchange rate
was adopted by the Central Bank in October
2006.
The system of bands sets a low and high
point for the colon exchange rate to the US
dollar. The exchange rate can float freely
within the high and low.
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