The competition for liquidity can be seen in the activity of the National Stock Exchange, where the amounts being released on the exchange are increasing because of the concurrence of the state banks - Banco de Costa Rica, Nacional and Popular, and of private banks like Scotiabank, and by other entities such as Grupo Mutual y la Compañía de Fuerza y Luz.
An article in Nacion.com notes "For Jose Luis Arce, economist at CEFS, the banks hurry to raise funds is due to the pressure being exercised in the market by the Ministry of Finance to meet its obligations. 'Banks, who have faced sustained growth of credit in local currency, have felt pressure on funding because demand for securities in colones has been very high’, said the analyst."
Meanwhile analysts from Aldesa point to the effects that there will be on the exchange rate when government bonds, known as Bde2012, and which are worth $250 million, mature. The Ministry of Finance has called for a dollar bond auction tomorrow, where it hopes to recapture some of the funds to pay for bonds that mature in 2015, 2020 and 2025.
In Aldesa they expect that "the exchange rate will lose momentum from Thursday and during the following week, as the national banking system gains more dollars, which will lower demand, and assuming that some proportion of the maturity is settled, so the supply of dollars will increase and demand for colones will go up on the wholesale MONEX market. "
Source: Nacion.com
More on this topic
August 2010
The banking system has increased its range of mortgage credits with terms of up to 30 years in both dollars and colones, the local currency.
The Costa Rican banking system's housing credit portfolio makes up 31% of 31% of all non-financial private sector loans, measured in colones. As of May year on year sector growth stood at 3.71%, according to the Central Bank.
April 2012
A $100 million issue by Banco Popular Costa Rica is available for trading on the Stock Exchange in Panama.
The bonds were offered for sale in Costa Rica in 2011 and were recently approved by the Superintendent of the Panama Stock Exchange.
Being a certified issue, securities may be traded in Costa Rica and Panama.
May 2010
High volatility in the value of the Costa Rican colon versus the U.S. dollar has fueled demand for financial derivates to hedge from such risks.
These products have been available in Costa Rica since 2007, but they have only recently been requested by investors, as the exchange rate has been extremely volatile as of lately.
April 2012
In the first three months of 2012 the Government of Costa Rica sold bonds on the Stock Exchange for 420,000 million colones ($828.56 million) and $254 million.
By comparison, in the first three months of 2011, the Ministry of Finance had raised 438,000 million colones ($864.6 million) and $124 million, according to data from the Stock Exchange.
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