Costa Rica’s Exchange Rate: What’s Really Going On

If you live in Costa Rica long enough, you stop asking what the exchange rate is and start asking why daily life suddenly feels more expensive, even when the numbers appear calm.

For years, many expats grew used to a weaker colón. The dollar went far. Budgets felt predictable. That balance shifted sharply beginning in mid-2022—and by early 2026, the consequences of that shift are still working their way through the economy.

As of February 2026, the Costa Rican colón is trading near ₡500 per U.S. dollar. On the surface, that looks stable. In practice, it masks a much more complex—and for dollar earners, often frustrating—reality.

This article explains what actually changed, how Costa Rica’s exchange rate is formed, why the dollar feels weak despite being abundant, and why daily costs can feel higher even in a deflationary economy.

Where the Exchange Rate Stands Today

Costa Rica publishes an official reference exchange rate through the Banco Central de Costa Rica (BCCR). This rate reflects wholesale market activity but is not the rate most individuals receive.

As of January–February 2026:

• BCCR reference rate: approximately ₡492 buy / ₡499 sell
• Public banks (BNCR, BCR):
  • Tight spreads, typically ₡6–₡8 from the reference
• Private banks (BAC, Scotiabank, others):
  • Wider spreads, commonly ₡12–₡15, especially for smaller or frequent conversions

This difference explains why two people converting money on the same day can have very different outcomes depending on where and how they exchange.

How Costa Rica’s Exchange Rate Is Actually Formed

Costa Rica does not operate a fixed exchange rate, but neither does it allow a completely free float.

Reference Rate vs. Real Life

The BCCR reference rate is a benchmark derived from wholesale market activity. Banks and exchange houses apply their margins based on risk, volume, and operational expenses.

The Role of MONEX

At the center of the system is MONEX (Mercado de Monedas Extranjeras), the wholesale foreign exchange market where authorized institutions trade large volumes of currency.

MONEX does not set your bank’s price directly, but it anchors expectations across the system. The BCCR uses MONEX data to publish reference indicators, and banks price around those signals.

Put simply: MONEX is where the real market speaks quietly—and everything else follows.

The Big Shift That Still Shapes Daily Life

The most important part of this story did not happen recently.

Between mid-2022 and late 2023, the Costa Rican colón strengthened sharply against the U.S. dollar. The move was large, rapid, and widely noted by international institutions.

That appreciation permanently changed behavior:

• Dollar income now converts into fewer colones
• Local costs feel higher to foreign earners
• Dollar-priced rents and services became misaligned
• Wage and service pricing adjusted slowly, if at all

Even though the exchange rate has since stabilized near ₡500, the economy is still digesting that earlier shock.

A Critical Reality: Costa Rica Is in Deflation

As of the end of 2025, Costa Rica entered a deflationary environment, with year-on-year inflation around –1.2%.

In theory, deflation should increase purchasing power. In practice, for dollar earners, the opposite has often occurred.

Prices are declining slowly, while the dollar fell quickly.

The result is a paradox:

• National inflation is negative
• But the real cost of living for USD and CAD earners has risen
• Especially for rent, labor, services, and locally priced essentials

This is why prices feel “sticky.” They are technically falling in some sectors, but not nearly fast enough to offset the exchange rate shock.

If There Are So Many Dollars, Why Is the Dollar Weak?

The dollar feels weak in Costa Rica not because dollars are scarce, but because so many dollars enter the country and are immediately sold.

Costa Rica receives large and steady dollar inflows from:

• Tourism
• Exports and services
• Foreign direct investment
• Expats and retirees bringing in monthly income

Most of those dollars do not stay as dollars. They are converted into colones to pay wages, construction, utilities, groceries, local services, and taxes.

When many people are trying to sell dollars at the same time, the price of dollars falls.

Currencies move on pressure, not popularity.

The Missing Piece: Government Financing and Reserves

In 2025 and early 2026, a new and decisive source of dollar supply entered the system.

Costa Rica successfully issued Eurobonds and secured IMF-supported credit lines, injecting large volumes of foreign currency directly into Central Bank reserves.

This reduced the BCCR’s need to buy dollars from the market, raised reserves without market competition, and further suppressed upward pressure on the dollar.

In short, non-market dollars changed the balance.

A Managed Float With Active Intervention

While Costa Rica does not fix its exchange rate, the system functions as a managed float.

In late 2025 and early 2026, the BCCR intervened aggressively in MONEX, purchasing large volumes of dollars—in some cases $50 million or more in a single session—to prevent further colón appreciation.

These interventions were intended to stop the exchange rate from falling into the ₡480 range.

The result is stability near ₡500 that is policy-supported, not purely organic.

Why Life Still Feels Expensive

A stronger colón and national deflation should lower costs. Yet many people experience the opposite.

Common reasons include:

• Sticky prices that do not adjust downward quickly
• Tourist-market pricing driven by demand rather than exchange math
• Labor costs that adjust very slowly
• Currency mismatch when income is in USD or CAD and expenses are in CRC

The exchange rate is only one gear in a larger machine.

What Expats Can Do

This environment rewards discipline, not speculation.

• Match currency to expenses
• Reduce conversion frequency to limit spreads
• Put currency terms in writing for rent and services, including whether amounts are fixed or tied to a reference tipo de cambio
• Use neutral reference points such as BCCR rates, bank ventanilla quotes, and MONEX indicators

Clarity prevents conflict.

What Comes Next

Forecasts change. Policy shifts. Markets move.

The responsible approach is to assume normal volatility and structure finances so exchange-rate swings are manageable, not destabilizing.

Good planning does not depend on prediction. It depends on preparation.

Bottom Line

The U.S. dollar feels weak in Costa Rica not because it has lost global value, but because it is oversupplied locally, constantly sold, and actively managed by policy in a deflationary economy.

For expats earning in U.S. or Canadian dollars, understanding that mechanism matters far more than watching the rate each morning.

Prognosis

Looking ahead, the most likely outcome for 2026 is continued stability around the ₡500 level, supported by active Central Bank management rather than pure market forces. With Costa Rica in a deflationary environment, interest rates already reduced, and dollar inflows still strong, there is little immediate pressure for a sharp rebound in the U.S. dollar. A gradual drift toward the ₡510–₡520 range later in the year is possible if dollar demand rises or policy easing continues, but any move is expected to be measured rather than dramatic. For expats, the prudent assumption is not a single forecast number, but a working range—and planning accordingly.