Q COSTARICA — In the first five months of the year, the dollar exchange rate has lost almost 50 colones in value, according to records from the Central Bank’s Foreign Exchange Market (Monex).
On January 1st, the US dollar closed at 497.07 colones, while last Friday it closed at ¢453 colones. This represents a total reduction of 44 colones.
The conflict in the Middle East between the United States and Iran has the potential to increase the value of the dollar.
However, experts in this area say that the increase in the currency will not be significant, so businesses and individuals who receive their income in dollars should expect the dollar to remain below 500 colones for the rest of the year.
“In general, we can say that the exchange rate is maintaining the trend it has shown in recent months, and indeed, in recent years in general. The excess of dollars in the economy is causing the exchange rate to show a clear downward trend, making it difficult to say when it will rebound,” explained Luis Alvarado, economic and stock market analyst at ACOBO Stock Exchange.
The specialist indicated that there are currently several variables putting downward pressure on the value of the dollar, including the end of the peak tourist season and the steady inflow of foreign investment.
Added to this is the Central Bank of Costa Rica’s prudent policy regarding the Monetary Policy Rate (MPR).
Coincidentally, at the end of last week, despite the dollar exchange rate continuing to reach historic lows, the Central Bank again opted for prudence with the MPR.
Due to uncertainty surrounding the conflict in the Middle East and the impact of El Niño on inflation, the Central Bank decided to maintain the Monetary Policy Rate (MPR) at 3.25%.
This means that interest rates on loans and credit cards will not decrease in the medium term; instead, they will remain high, attracting investors who seek to take advantage of favorable conditions and earn profits.
The measure affects borrowers and those who receive their income in dollars, as the economy receives more dollars, thus lowering the exchange rate.
“In the international environment, uncertainty persists regarding the magnitude and duration of the economic effects of the conflict in the Middle East. This has increased international commodity prices, especially for oil, fertilizers, and some food products, which is putting upward pressure on inflation and affecting global growth prospects. Given this situation, most central banks have opted to maintain their benchmark interest rates,” the Central Bank stated.
What to do?
The current exchange rate situation presents opportunities, but also risks. Experts recommend paying down debt, setting spending limits, protecting margins, and maintaining diversification to make more sustainable financial decisions in the face of exchange rate volatility.
For individuals:
- Take advantage of the low dollar to pay down dollar-denominated debt or consider converting it to colones for greater stability.
- Set a monthly limit in colones for dollar-denominated expenses and avoid overspending due to the perception of being “cheap.”
- If you earn in dollars, convert the money gradually to average the exchange rate and protect your cash flow.
For Businesses and SMEs:
- Exporters: the low dollar reduces the value of income in colones, so they must protect margins (prices, terms, cash flow).
- Importers: they may have better costs, but they should not assume that the exchange rate will remain the same.
- Key takeaway: When making trading decisions, work with exchange rate ranges, not a fixed value.
For Investors and savers:
- Maintain diversification and align your investment currency with your financial goals.
Consider your investment horizon, as prolonged fluctuations redistribute winners and losers. - A weak dollar benefits those who pay in dollars but puts pressure on sectors that generate income in that currency.
The takeaway: The US dollar is expected to remain below 500 colones for the rest of 2026.