The U.S. dollar slid back toward 450 colones last week, reversing a brief rally and once again shrinking the purchasing power of anyone in Costa Rica who earns, saves or receives income in dollars. On Monex, the wholesale foreign exchange market run by the Central Bank of Costa Rica (BCCR), the dollar closed Friday at â‚¡452.92. That was down â‚¡5.70 from â‚¡458.62 a week earlier, according to central bank data.
The decline erased most of a short-lived rebound as the dollar had climbed through late September and early October, reaching â‚¡460.45 on Oct. 1, its highest close in months, before resuming the downward trend that has dominated the market this year. Friday’s level is close to where the currency traded in mid-July, when the weighted average dipped below â‚¡450.
The BCCR reference rate in effect for today is â‚¡449.86 to buy dollars and â‚¡455.60 to sell them. For a expat household here converting $2,000 a month, Friday’s Monex close works out to just about â‚¡905,840 or roughly â‚¡15,060 less than the same amount would have gotten you at the Oct. 1 peak. Retail rates are less favorable. On Friday, every bank was paying at least â‚¡440 per dollar, which puts that same $2,000 closer to â‚¡880,000 for someone exchanging at the bank.
The three major banks here, Banco de Costa Rica, Banco Nacional and Banco Popular were selling dollars at â‚¡460 on Friday, while other private operators offered between â‚¡459 and â‚¡464. Trading picked up sharply during the week. Monex volume reached $272.57 million, an increase of $123.04 million over the previous week, with the heaviest session on Monday at $68.67 million and the lightest on Wednesday at $36.21 million.
The central bank was an active participant as it bought $135.55 million on behalf of the non-bank public sector, up from $71.36 million the week before, and made no purchases to build its own reserves. It also carried out a $71.32 million stabilization operation to curb volatility, its first since Sept. 16.
Supply also continued to outpace demand at the banks. From Monday through Wednesday, financial intermediaries bought $439.18 million from the public and sold $356.36 million, leaving a net surplus of $82.82 million, according to BCCR data. A steady surplus of dollars on offer is one of the main forces holding the price down.
The slide comes as consumer prices begin to rise again. Year-on-year inflation reached 0.34% in September, the first positive reading since April 2025 and the end of 16 consecutive months of negative rates, according to the National Institute of Statistics and Census (INEC). Eggs rose 18.12% during the month, and housing rents also increased, while gasoline fell 1.45%. Inflation remains well below the central bank’s 3% target and its tolerance range of 2% to 4%.
A weaker dollar lowers the colón cost of imported goods and travel abroad, but it cuts into the earnings of exporters, tourism operators and others whose revenue arrives in dollars and whose costs are paid in colones. One coffee producer has described the impact of the low exchange rate as more damaging than the pandemic.
With Monex trading under way again this week, the direction of the rate will depend largely on whether the flow of dollars into the banking system keeps exceeding demand and how actively the central bank steps in to smooth movements in the exchange rate.
