Emerging Markets Rates and Currencies Handbook

83 Citi | Emerging Markets Currencies Handbook 2021 Convertibility Costa Rica has not yet developed a floating benchmark. Banks rely on the repo and reverse repo market to address short term liquidity needs, as the secondary market for government securities is not deep enough. Citi makes markets in short and long term rates as needed by corporate flows. Citi makes market in short and long term rates as needed by corporate flows Market opening hours and liquidity during the day 10.00 12.00 13.00 Good Liquidity No Liquidity Moderate Liquidity Fixing (incl. ticker) Tipo de Cambio Ponderado MONEX: it is the weighted average of all transactions dealt in the interbank market (MONEX), published at the end of the day (used for derivatives’ fixing). Regulation Offshore restrictions In Costa Rica, no offshore or onshore entities can trade derivatives onshore. Onshore entities are allowed to trade offshore. Non-resident restrictions None. Foreign investors are not subject to any restrictions regarding FX or cash transactions. Overdrafts are permitted for foreign investors provided credit facilities are in place with the local agent. License requirements Every single spot transaction has to be reported to the central bank by the banks at the end of the day. Clients are not required to report anything. Banks are also required to have a specific license to be able to trade derivatives onshore. Requirements to open a foreign currency account It is permissible to to open a USD account in Costa Rica and credit it with local currency (with an implied FX transaction to convert the funds). Deal Management Rollover : Rollovers are possible for NDFs and are net settled. Unwinding : Possible to unwind NDFs, They are net settled. Early Maturity : Possible, net settled. Documentation Requirements Product specific For spot transactions no local law documentation is required. NDFs are traded up to 1 year based on the limited market capacity. An ISDA is required to trade NDFs. Trade flows No local law documentation requirements. Capital flows/FDI No local law documentation requirements. Banco CMB (Costa Rica) S.A. Edificio B 5to piso Escazu, San Jose FX Sales Contact: +506 2201 0952 Costa Rica FX Spot FX Forwards NDFs FX Options Interest Rate Swap Interest Rate Options XCCY swaps Market Overview Onshore ** Offshore Onshore volume (MM USD daily) 130 — 140 N/A N/A N/A N/A N/A N/A Offshore volume (MM USD daily) 15 — 25 N/A Episodic N/A Episodic Episodic Episodic Onshore max tenor (or typical tenor for spot) T + 0 N/A N/A N/A N/A N/A N/A Offshore max tenor (or typical tenor for spot) T + 2 N/A Typically 1 year, goes up to 5 on case-by-case basis N/A N/A N/A N/A Onshore typical deal size (MM USD) 0.5 — 1 N/A N/A N/A N/A N/A N/A Offshore typical deal size (MM USD) 0.1 — 0.5 N/A 3 — 5 N/A N/A N/A N/A CitiFX Pulse Capabilities (onshore) CitiFX Pulse Capabilities (offshore) *LHS — refers to company selling base currency. RHS — refers to company buying base currency. **Expected Onshore NDFs: first semester 2021. Source: Citi indicative information