Q COSTARICA — Yesterday, Wednesday, 18 February, the dollar exchange rate reached its lowest value in the Mercado de Monedas Extranjeras (Monex) — Foreign Exchange Market, since 2005, according to the Central Bank.
The U.S. dollar surpassed the record reached the previous Friday of ¢482.1 colones per unit and closed yesterday at ¢479.5 colones.
But what is happening to make the dollar so cheap in Costa Rica? Why is the national market flooded with dollars? And how long could this situation last?
Record export figures, the recovery and peak season of tourism, continued growth in Foreign Direct Investment (FDi), and a prudent policy by Costa Rica’s Banco Central (Central Bank) regarding the Monetary Policy Rate (MPR) explain the phenomenon, according to several economists consulted by La República.
All of this has led not only to the U.S. dollar reaching historic lows, but also to the country’s international reserves reaching a record US$18.6 billion, with the prospect of surpassing the US$20 billion mark in the medium term.
“The growth in international reserves is due to a combination of factors. These include a greater inflow of foreign currency into the country, resulting from exports, tourism, foreign direct investment, and external financing, as well as prudent monetary policy management by the Central Bank. Furthermore, the strengthening of market confidence in the country’s macroeconomic stability has contributed to a greater accumulation of reserves,” explained Elizabeth Morales, Deputy Manager of Coopecaja.
The data
In 2022, when Rodrigo Chaves was inaugurated as president, FDi totaled just US$3.164 billion. By 2023, the figure had increased to US$3.788 billion; In 2024, it reached US$4.318 billion, and in 2025 it stood at US$3.533 billion, all amounts higher than those observed at the beginning of the current administration.
As for exports, these increased from US$15.587 billion in 2022 to a record US$22.855 billion at the end of the previous year.
In the case of tourism, year-on-year growth was only 1% between 2024 and 2025; however, the sector has already accumulated four consecutive months, since October of last year, with increases ranging between 5.9% and 13.6%, in addition to robust performance in previous years.
All these sectors have contributed to a steady increase in the inflow of dollars into the economy.
In addition, the Monetary Policy Rate (MPR), set by the Central Bank, has been slowly decreasing since 2023, when it was set at 9% to protect the economy from the war between Russia and Ukraine and the rise in international oil prices.
Today, the MPR stands at 3.25%, still far from the 1.75% recorded in 2022.
This situation also reduces the demand for dollars in the local market.
“The Central Bank of Costa Rica maintains a monetary policy that has resulted in a relatively higher policy interest rate than might be expected, given the negative inflation levels. This leads to a preference for demand for colones for savings and investment, while reducing demand for dollars,” explained Vidal Villalobos, financial advisor at Grupo Financiero Prival.
Finally, the government’s borrowing through Eurobonds in the international market has prevented pressure on the local market for financing, which also contributes to a greater availability of dollars.
The Outlook
So, what will happen during Laura Fernández’s administration? Will there be any changes in the dollar’s behavior?
The president-elect has indicated that she cannot intervene to set the exchange rate, as that is the function of the Central Bank, which operates based on technical criteria.
However, she did note that Costa Rica no longer receives dollars sporadically, as was the case in the past with the peak tourist season or year-end payments, but rather there is now a constant inflow of dollars.
“Our economy has changed. The Costa Rican economy now has a regular, non-seasonal flow of dollars circulating, unlike before, when the peak tourist season arrived. There are even companies that pay salaries in dollars,” Fernández stated.
A cheap dollar is a mirage that ends up costing the economy dearly.
The exchange rate is currently one of the factors most affecting the tourism sector, especially small and medium-sized businesses, due to the accumulated appreciation of the colón over the last three years.
Although tourism companies have maintained high-quality standards, the appreciation of the colón has reduced income in local currency, while income is in dollars, creating a financial imbalance.
The outlook for the dollar is that it will stay within a pretty tight range, between ¢500 and ¢525 colones during 2026.