Costa Rica: Productive Sectors Affected by Exchange Rate Unhappy with BCCR's Response
2024-05-31
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Representatives of the productive sector have voiced their discontent with the Central Bank of Costa Rica's (BCCR) recent responses. The BCCR's suggestions to accelerate the reduction in the monetary policy rate (TPM), currently at 4.75%, as a solution to the exchange rate appreciation issue have yet to be well-received. Abel Chaves, president of the National Chamber of Pineapple Producers and Exporters (Canapep), expressed disappointment with the BCCR's responses. He had hoped for a more positive outcome for the productive sector, considering the dialogue mediated by the Catholic Church, but found the BCCR's stance unchanged.
Representatives of the business chambers, the BCCR, and the mediation of the Catholic Church presented their proposals during a meeting at the end of April. In response to these requests, the BCCR Board of Directors ruled out the possibility of gradually returning to a nominal devaluation trend of 3% to bring the purchase exchange rate close to ¢620, as had occurred between 2013 and 2019. The business chambers requested an acceleration of the TPM reduction.
Chaves also questioned the BCCR's lack of commitment to the demands, especially considering the economy's constant period of negative inflation. Randall Murillo, executive director of the Costa Rican Chamber of Construction, expressed concern for the institution's lack of dialogue and connection with the country's reality and its lack of interest in understanding the needs of the productive sectors struggling to maintain employment.
Chaves mentioned that Canapep sent a letter to the Board of Directors of BCCR requesting explanations regarding registering foreign exchange movements of private sector operations, as a large volume is classified as "Others". Although it has been indicated that the content of this item will be explained, a response has yet to be received. Chaves stated, "We are observing a lack of willingness in the Central Bank for the country to continue to be successful in the productive sectors."
Representatives of the National Coffee Congress, the National Chamber of Tourism (Canatur), the Costa Rican Union of Chambers and Associations of the Private Business Sector (Uccaep), the National Chamber of Cargo Transportation (Canatrac), Canapep, and the Chamber of Construction participated in the April meeting. Additionally, the National Chamber of Banana Growers, Cadexco, the Association of Free Zones (Azofras), the Association of Banana Producers (Asoproban), the Costa Rican Chamber of Industries (CICR), and the National Chamber of Agriculture and Agribusiness (CNAA) were present.