The U.S. dollar closed the week at its cheapest level in the history of Costa Rica’s official currency market, capping a four-year slide that has reshaped the finances of every foreign resident, retiree and remote worker who converts dollars into colones — and that the Finance Ministry now concedes is denting its own tax collection.
The dollar finished Friday at ¢452.96 on the foreign currency market known as Monex, according to figures published by the Banco Central de Costa Rica (BCCR). That is ¢0.89 below the ¢453.85 recorded the previous Friday, and it closes out a week in which the currency set two of the lowest marks ever registered.
On Tuesday, July 7, the dollar was quoted at ¢452.11, the lowest value since the Central Bank began its Monex series on December 6, 2007. On Wednesday it settled at ¢452.43, the second-lowest figure on record. The previous all-time low, set on May 26, was ¢452.74.
For anyone living in Costa Rica on dollar income, the shift is not abstract. In June 2022 the dollar was worth ¢696.76. Roxana Morales, an economist at the Universidad Nacional, said that between June 2022 and May 2026 the monthly average fell 34%, an appreciation of ¢234.6 for the colón.
Measured year over year, the colón has strengthened roughly 10%. Since June 5 the dollar has not closed above ¢460. A retiree drawing a $2,000 monthly pension who was collecting close to ¢1.4 million four years ago now collects roughly ¢906,000 at Friday’s rate — before accounting for any rise in rents, groceries or utilities over the same period.
The exchange rate most residents actually transact at is worse than the Monex headline. Monex is the wholesale market where banks and large institutions trade with one another, while retail customers pay bank counter rates. As of Friday afternoon, Banco Nacional and Banco de Costa Rica were selling dollars at ¢459.
Banco Popular was at ¢460, as were the private banks BAC, General, BCT, Davivienda and Davibank. Banco Lafise and Banco Improsa were selling at ¢461, while Promerica offered ¢459. The BCCR’s official reference rate for Saturday, July 11, is ¢448.53 to buy and ¢455.40 to sell.
Economists point to an entrenched oversupply of dollars rather than any single trigger. Morales said the process has been underpinned by strong net inflows of foreign currency, which show up directly in the growth of Costa Rica’s international reserves. Those reserves stood at $20.654 billion as of July 8, the most recent figure available, down slightly from a record $20.973 billion reached in early May. The dollars come from three main sources: foreign direct investment, tourism and exports.
Pablo González, an economist with Grupo Financiero Mercado de Valores, said trading volumes on Monex ran modestly below average last week without changing the underlying picture, and that market conditions have not shifted meaningfully in the past month. He noted the Central Bank has intervened comparatively little of late, meaning the downward pressure came largely from private participants trading among themselves.
The Central Bank did buy $13.5 million on Friday and $82.5 million across the week, but that money was purchased to cover the dollar needs of state entities such as the oil refiner Recope and the electricity institute ICE, not to prop up the exchange rate. What is new is the government’s acknowledgment of the cost.
In an interview, Deputy Revenue Minister VÃctor Carvajal said the low dollar is hurting the treasury, principally through income tax, because the strengthening colón produces exchange-rate losses on the books of significant taxpayers and lowers what they owe. Asked directly, Carvajal said he would not pretend the low exchange rate has no effect on the ministry.
The Finance Ministry’s Medium-Term Fiscal Framework 2026–2031 projects a ¢98 billion shortfall in income tax collection this year, roughly $216 million, and a ¢87 billion shortfall in value-added tax, roughly $192 million. First-quarter figures already show internal VAT receipts down ¢13.975 billion and income tax down ¢5.543 billion against the same period last year, with income tax falling in seven of the 16 economic activities the ministry tracks.
Manufacturing accounted for ¢24.955 billion of the decline and commerce ¢23.433 billion. Carvajal said he expects enforcement work in the field to help recover ground later in the year, and attributed part of the shortfall to tax-relief laws passed by the previous Legislative Assembly. These are preliminary and projected figures, subject to revision.
The pain is not evenly spread. Exporters and the tourism sector are among the clearest losers, earning in dollars while paying wages, rent and suppliers in colones, so each dollar of revenue covers less. That is the same arithmetic squeezing foreign residents. Importers benefit, buying abroad in dollars and selling domestically in colones, which in theory should show up as cheaper imported goods on Costa Rican shelves.
Anyone carrying dollar-denominated debt while earning colones also comes out ahead, needing fewer colones to service the same loan. The government itself gains on its foreign-currency obligations, which it services with tax revenue collected in colones.
Whether the trend continues is the open question. The Central Bank bought $3.429 billion of the $5.309 billion traded on Monex in the first half of 2026, or 64.5% of the total, a measure of how much dollar supply the market has been absorbing. Absent a shift in foreign investment, tourism receipts or export earnings, the structural surplus that has driven the colón to record strength shows no sign of reversing.
