Boynton wrote:
The CR Treasury pays the Christmas Bonus (Aguinaldo) this Friday to all public employees and pensioners of the CCSS. The cash dump will be over c160 BILLION colones ($275,000,000USD) in one big grunt. All other employees must receive their cash-induced sugar rush shortly after.
https://www.crhoy.com/nacionales/funcio ... e-viernes/This year, the payments are on a Friday before a 3-Day weekend (05-Dec is a national holiday). Plus, on Thursday, CR will either be eliminated from the World Cup competition or advanced to the next stage.
What this means to gringo's
1. ATM's will have long lines and run out of cash. Get what you need out before Friday.
2. BUY any vital fluids (beer & hooch) before Thursday.
3. IGNORE the exchange rate until after the end of the year.
To add some additional color, many of the big private sector employers in Costa Rica are US Corporations, and their operations in Costa Rica are cost centers with little or no local revenue (Amazon, Microsoft, ect).
What this means is they have to change a substantial amount of dollars into colones in order to pay those bonuses. So, this increases demand for colones while introducing an ample supply of dollars.
So, the end of the year
always brings this dollar value crash.
Also, the real thing driving exchange rates are central bank interest rates.
https://countryeconomy.com/key-rates/costa-ricaAs you can see Costa Rica went from 1.75 percent to 9 percent on the central rate this year. So, they kept up with the dollar interest rate hikes, preventing massive devaluation.
So, do not expect the colon to take a dive just now.
https://www.crhoy.com/economia/por-que- ... ponsables/However, Ticos are getting hit with crushing interest rates. Credit card rates are often 50 percent annual. Next year could see more unemployment and businesses that run out of cash are going to crash hard.