The Banco Central de Costa Rica (BCCR) – Central Bank of Costa – reported Friday that it has been using its International Reserves to smooth the changes in the exchange rate.
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So far this year, the Central Bank has used (to October 12) US$1.101 billion dollars in order to ensure “an orderly process of price formation and avoid abrupt movements in the exchange rate”.
The use of reserves has occurred in two ways:
First, it has made direct currency sales in Monex to prevent abrupt movements in the exchange rate.
The second, indirect but more important in quantitative terms, is that the Central Bank has been selling foreign currency to the non-banking public sector, and has not restored it through purchases