by Rod Hughes

Internet money speculators are playing hob with the value of the colon. Late last year, Costa Rica raised the value of its colon against the dollar and for a time only about 487 of the local currency was needed to buy a dollar. Last week, it went up to 501 but that was just the beginning.

Monday, Banco Nacional raised the colon value unlaterally and drastically, surprising even the Central Bank. The buying model jumped from 505 Friday to 517 on Monday and the sale from 511 to 523. Bank spokesman Luis Carlos Mora said the move was to foil currency speculators who used the Internet overnight to manipulate currencies. He promised that today the colon would lose value by 5 colones.

Central Bank manager Roy Gonzalez commented, “It seems strange to us that Banco Nacional would adjust the exchange rate more drastically than the variation in Monex.” (Monex is the world currency market.) Economist Juan Munoz told the daily La Nacion, “The exchange rate shouldn’t be so elevated especially when Banco Central has $5.9 billion in reserve.”

Volume of trading colones vs. the dollar was a brisk $71 million on Friday but only $8 million yesterday. “Today, things were calmer,” said Gerardo Gonzalez of BAC of the trading Monday, “We don’t find any explanation for what happened.”