Comments on: From the US, President Solis talks colón devaluation, tax reform, China (VIDEO)

By: zzzzz

zzzzz — Sun, 04 Oct 2015 18:26:00 +0000

he was saying if interest rates go up in US it was a disaster. So devaluation would exacerbate that. He was pretty sanguine against a devaluating currency to me. Not showing sympathy with the two sectors pushing it.

By: zzzzz

zzzzz — Sun, 04 Oct 2015 18:11:00 +0000

another problem with a devaluated colon is a reduction in the purchasing power of Ticos including the cost of operating a business that uses anything purchased outside the country such as fuel, tools, chemicals, fertilizers.
Stability in the currency helps local business rather than foreign business.
And it seems like a fair and reasonable thing to think that the central bank is on the ball when they say
” does not believe an artificial devaluation of the currency would promote economic recovery nor reduce unemployment.”
I think one big motivator for devaluation would be out of control inflation.
And if they were to let the colon float, the forex markets would tear it apart because there isn’t enough colones to fend off even a small hedgefund not to mention the brutal treatment that the bond market would receive after a Moody’s or S&P bitch slapping like we recently received.

By: Yeims

Yeims — Sat, 03 Oct 2015 12:26:00 +0000

Boy, I sure hope so !!!

By: Ken Morris

Ken Morris — Sat, 03 Oct 2015 05:56:00 +0000

What I heard him saying–obliquely–is that good luck with energy costs has stalled the devaluation, although even more obliquely, Rick may be right that he’s referencing some real problems problems with a quick devaluation under the heading “unexpected impacts.” However, it sounded to me that he was saying devaluation is around the corner.

By: Ben

Ben — Fri, 02 Oct 2015 13:44:00 +0000

Goverment in Costa Rica needs to show they can cut the public sector first than maybe raise Taxes on Public sector later.

By: Roberto

Roberto — Thu, 01 Oct 2015 20:26:00 +0000

In fact, Central American Date, the online financial
reporter, just called the country an ineptocracy, meaning a place run by the
inept. The Urban Dictionary describes the term as “a system of government
where the least capable to lead are elected by the least capable of producing,
and where the members of society least likely to sustain themselves or succeed,
are rewarded with goods and services paid for by the confiscated wealth of a
diminishing number of producers”

By: prdatki

prdatki — Thu, 01 Oct 2015 17:35:00 +0000

What needs to be done is remove all benefits for Politicians and the Public sector cut their pay to what the private sector makes. Stop giving money to the Church and Tax them at 40%.

By: costarick

costarick — Thu, 01 Oct 2015 17:33:00 +0000

One obvious problem is the great number of U.S. Dollar loans and mortgages that exist in Costa Rica, being paid by Costa Ricans earning their wages, or salaries in Colones. Obviously, a steep devaluation in the Colon could have a significant impact on the monthly payments having to be by the borrowers, by an increase in the Colon to Dollar exchange rate paid. The Colon should be devalued to its true value, but gradually overtime.

By: Yeims

Yeims — Thu, 01 Oct 2015 17:18:00 +0000

Some clearly described advantages to devaluation of the colon, but the possible consequences of doing so might have some darkly “unexpected impacts”. Someone might want to explain that “unexpected impacts” are what make a horse race. Everything is a gamble, in one way or another, and you just have to bet on what you believe to be a winner. It seems to me that either this problem has not been sufficiently studied, or there are other motives for maintaining what many consider to be an overvalued colon.