Q COSTARICA — If you receive all your income in dollars and spend in colones, as many foreigners in Costa Rica do, it’s clear that your finances have been hit hard by the dollar exchange rate in recent days.
In addition to dealing with the colón’s appreciation against the U.S. dollar for over two and a half years, this year the dollar has suffered a much more significant drop than expected.
Between November 5th and December 5th, the reduction of ¢14.97 colones was reported in the Foreign Exchange Market (Monex).
For example, for someone with an average monthly income of US$3,000, this reduction translates to a decrease in income of about ¢45,000 when converted to colones.
At the same time, the lowest values since 2006 are being reported, according to records from the Central Bank of Costa Rica (BCR).
Last Friday, for example, the US dollar closed at ¢489.44 colones.
What to do?
The value of the U.S. dollar doesn’t just affect big banks or international trade — it impacts everyday life,from how much you pay for that cup of coffee to the cost of imported goods on store shelves. A weak dollar can trigger ripples through the economy, potentially driving up prices and eroding purchasing power.
Given this situation, the question arises: What can you do to protect yourself from a weak dollar?
In the case of salaried workers, several experts consulted by LA REPÚBLICA offered advice focused on planning, since there is little that can be done at this time to recover liquidity. The good news is that a budget and other tools would allow you to deal with the dollar in the future from a better position.
For example, if you have dollar-denominated debts from credit cards or loans, you could consider making advance payments.
Another piece of advice is to create an emergency fund to address unforeseen events, such as the current one, so that you have savings in colones to help you cope with the situation.
“People should make projections to identify seasonal patterns in currency behavior, always to find the best time to buy dollars,” explained Luis Alvarado, an economic and financial analyst at Grupo Financiero ACOBO, who asserted that it is clear the dollar tends to drop significantly during December.
These planning-oriented tips are valid because the expectation is that the dollar exchange rate will remain low throughout 2026, added economic analyst Daniel Suchar.
One straightforward move is to diversify your investments. Instead of keeping all your money in dollar-denominated assets, consider a mix that includes colones. Another practical step is to look at your spending habits. If your favorite products are imported, explore alternatives such as local produced.
The obvious here is a weaker dollar doesn’t stretch as far, meaning for tourists and expats alike, your money might buy fewer goods and services than before. This can mess with budgets and plans.
Shopping around for better exchange rates can help. Airports and hotels often offer convenience but at a premium. Local banks and exchange houses usually give you more favorable rates. It pays to do a bit of legwork rather than settle for the first rate you see.
Keep an eye on the current exchange rate trends and adjust your spending accordingly. Costa Rica offers options for almost every budget, so planning meals, transportation, and activities with the colón in mind lets you make smarter choices.
For tourists, if you know you’ll need to make a big purchase, like renting a car or booking tours, locking in prices early can save you from future rate shifts. Some vendors might accept dollars directly, but negotiating a price in colóns can sometimes work to your advantage when the dollar slides.
Currency fluctuations aren’t random—they often reflect global trends or local economic policies. Staying informed helps you make timely decisions about whether to bring more dollars, convert early, or hold off.
What’s happening with the dollar?
With the arrival of Christmas and the onset of the trade winds, the dollar exchange rate has plummeted.
But what’s causing the dollar to trade so low?
The dollar exchange rate is just days away from completing a month below the ¢500 threshold. The last time we saw the dollar below the ¢500 was in 2007, when it closed the year at ¢497.80.
In 2021, the dollar had a steady appreciation, closing the year at ¢637.98, slipping each December to the current low.
“Typically, at the end of the year, we see a greater supply of dollars due to businesses paying the Aguilnaldo (Christmas Bonus) and year-end expenses, as well as the peak tourist season,” explained Villalobos.
The expert points out that if the dollar falls even further, sectors like exports and tourism would be more severely affected.
The Central Bank has already indicated that it will be buying more dollars to prevent a further drop in the dollar’s value and, at the same time, further strengthen its international reserves.