by Rod Hughes

The value of the dollar against the colon continued its rise yesterday but the trading frenzy of Friday has calmed. Yesterday´s hike of 3.87 colones per dollar was only slightly higher than the Monday rise of 3.44 and much less than the sharp jump of 9.50 registered on Friday, according to the daily La Nacion..

Conxulted by the newspaper, economist and former Central Bank president Rodrigo Bolanos considers that speculators are expecting a devaluation of the colon and not a hike in its value as it experienced late last year. “People prefer to have more of their assets in dollars,” he said. This change in attitude effects the market.

Previously, La Nacion quoted a prominant economist as saying that the Central Bank had $5.9 billion in dollar reserves. (This was quoted again yesterday in this newsblog.) But it appears that the figure is inflated. In early May reserves were $4.945 billion but this dropped to $4.926 billion on May 9. However, the difference in figures would not alter the opinion expressed by the economist—the Central Bank has a comfortable reserve in dollars due to continuing foreign investment, exports and tourism. The reserves are important so the bank can confront such problems as petroleum prices and exchange speculation.