CRC: A Bold, Inevitable Move

Our call for a one-off move in the Costa Rican colón has played out, with the Banco Central de Costa Rica 's (BCCR) decision on November 21 to shift the band within which the currency floats. The colón will now be maintained within a band with the lower end just below CRC500.00/US$, which will broaden over time. We see further appreciation ahead for the unit, as the bank continues to move toward an inflation-targeting regime and capital inflows apply upside currency pressure.

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