www.CostaRicaTicas.com

Tico times this am announced that CR will be reverting to a "Floating Currency" for the valuation of the Colon to the dollar. My question is for you market/money investors out there. What affect will a Floating Currency valuation have on the Colon, should we see an even better exchange rate for the dollar? As we all know the exchange rate at local banks in the states for the colon are horrible. Comments anyone????

The exchange rate for gringos in the past 12 months have been favorable to gringos by about 8%.
The announcement is just restating formally what has been the policy since early least year. So their is no anticipation of change in valuation based on this announcement.
However, the exchange rate could be affected by other variables. These variables would probably benefit gringos

I see 585/600 colonies to the dollar by year end. How will it affect everyone, all hotel and local business costs will go up accordingly (inflation) with little or no change to tourists paying in dollars. Beer at 500/$1 equals Beer at 530/$1 (example not actual numbers), employees will receive 5/10% increase in wages (dictated by Gov) which will offset their higher food, electric, bus... expenses. Just my opionion.

Those who hold bank cd's in colonies paying 7 to 8% will probably want to reconsider their investment and move to dollars.

The only thing that's guaranteed with a floating currency is volatility. Which way that volatility goes and how strongly, and whether that volatility affects you is 6-5 pick'em. 2 things CR has going for it are stability and reasonably strong foreign currency reserves. This Site may help investors/ money managers going forward: http://www.tradingeconomics.com/costa-r ... e-reserves
I'd sure be careful about getting in too deep with arbitrage and/or gold-buying.

_________________
"A man accustomed to hear only the echo of his own sentiments, soon bars all the common avenues of delight, and has no part in the general gratification of mankind"--Dr. Johnson
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A good forecast on "stable currency"
Feb 2 (Reuters) - Costa Rica's central bank said
on Monday is had lowered interest rates 50 basis points to 4.75
percent to take advantage of a steep decline in oil prices to
help meet its 2015 economic growth target of 3.4 percent.
Costa Rica is an energy importer, so low oil prices allow
the central bank to try and raise growth with less risk of
stoking inflation, which was 5.1 percent in 2014."For the next quarters, we estimate there will not be
additional demand pressure on inflation, the exchange rate will
continue relatively stable, and we will see the manifestation of
the reduction in the price of hydrocarbons," the central bank
said in its macroeconomic projections for 2015-2016.The rate cut was announced on Saturday, but took effect on
Monday. In Saturday's projections, the central bank set an
inflation target of between 3 percent and 5 percent for 2015.

(Reporting by Kike Pretel; Editing by Alan Crosby)