The president of the Central Bank of Costa Rica, Róger Madrigal, warned that the recent weakness of the U.S. dollar against the colón could reverse “at any moment,” a message aimed especially at people and companies with dollar-denominated debt.
The warning comes after months of pressure on the exchange rate, with the colón continuing to trade at unusually strong levels. Today the Central Bank listed the reference exchange rate at ₡456.63 for buying and ₡460.89 for selling. The Bank’s main policy rate remained at 3.25%.
Madrigal said the drop in the dollar does not remove exchange-rate risk. His concern is focused on borrowers who earn income in colones but owe money in dollars. If the dollar rises sharply, those borrowers could face higher monthly payments and tighter liquidity, particularly if they do not have exchange-rate coverage.
The Central Bank chief said the exchange rate continues to respond to market forces, which in recent years have favored appreciation of the colón. Costa Rica has seen strong dollar inflows from exports, foreign direct investment, tourism, and free-zone companies, while higher returns in colón-denominated instruments have also helped attract capital into the local currency.
The sustained strength of the colón has become a point of concern for exporters, tourism operators, and other businesses that earn income in dollars but pay many expenses in colones. A lower dollar can reduce the local-currency value of foreign earnings, putting pressure on margins in sectors that depend heavily on international clients.
At the same time, the strong colón has benefited some consumers and borrowers by making imported goods and dollar payments cheaper in local-currency terms. For residents, expats, and tourists using dollars, however, the shift has made Costa Rica feel more expensive than in past years.
The warning also comes as the Central Bank monitors external pressures, including higher fuel costs linked to the conflict in the Middle East. Madrigal said Costa Rica now expects to pay about $650 million more for fuel imports this year and about $420 million more next year, increasing the country’s external bill by more than $1 billion.
For now, the Central Bank has not signaled a move to force the dollar higher. Madrigal’s message was more direct: the recent trend should not be treated as permanent. Borrowers with dollar debt, especially those paid in colones, should prepare for the possibility that the exchange rate could move the other way.
