- Category: Business
- Published on Wednesday, May 30 2012 02:07
- Written by Rod Hughes
- Hits: 435
Costa Ricans buying Euros last week saw their foresight repaid when the European market currency slumped to 641 colones. Only a week before, it was 667.5 per Euro.
The Central Bank says that the colon has gained 6% since March against the Euro, due to two phenomena: Not only has the Euro lost ground to the dollar but the colon has gained strength against the dollar as well.
The European angst about the Greek -- well, we were about to say "tragedy" but that may be overstated --economic crisis and the elections in France are reflected in world markets and economies.
The news service Agence France Presse (AFP) reported last week that the Euro has fallen to levels of July, 2010. Analyst David Song says the weakness of the European currency is caused by increasing possibility that Greece might pull out of the common Market.
Rodrigo Bolanos, president of the Central Bank, predicts that the colon will slowly gain strength for the rest of the year. This is good for the bank, which looks to buy more dollars to strength its foreign currency reserve.
It is not music to the ears of exporters and tourism businesses which are always hurt by a stronger colon. William Rodriguez, head of Canatur, the tourism chamber, says that his association is not expecting any action in the near future although it remains vigilant.
Although exporters doing business with Europe do so in dollars, Chamber of Exporters head Monica Araya said she does not expect a significant effect from the Euro's weakness. But a decline of the dollar would be different tale.