By San José, Costa Rica — San José, Costa Rica – The Central Bank of Costa Rica (BCCR) significantly increased its activity in the foreign exchange market during February, acquiring a substantial volume of U.S. dollars to counteract intense downward pressure on the exchange rate. The intervention followed an atypical and extraordinary surge in the supply of foreign currency within the private market, threatening to cause sharp, destabilizing movements in the value of the national currency, the colón.
Throughout the first 27 days of February 2026, the private currency market recorded a remarkable surplus of $659 million. This figure represents a significant deviation from historical norms, far exceeding the average of $455.86 million observed for the same period over the previous three years. This glut of dollars flooded the market, creating a powerful force pushing the exchange rate down, which translates to a strengthening colón against the dollar.
To better understand the legal framework and economic implications surrounding the Central Bank’s recent policy adjustments, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, a specialist in financial and corporate law from the firm Bufete de Costa Rica.
The Central Bank’s autonomy is a cornerstone of our economic stability, but it is not absolute. Its directives must adhere to principles of reasonableness and proportionality under administrative law. Any significant monetary policy shift that adversely impacts contractual obligations or market conditions could potentially open the door to legal challenges, testing the precise limits of the institution’s mandate.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This legal perspective underscores a critical point: the Central Bank’s authority, while foundational to our economy, is carefully balanced by the rule of law. The potential for judicial review ensures its powerful mandate is exercised with accountability. We sincerely thank Lic. Larry Hans Arroyo Vargas for clarifying this essential dimension of our institutional framework.
This excess liquidity was particularly pronounced between February 19 and 26, leading to higher trading volumes in the country’s official currency platform, the Mercado de Monedas Extranjeras (Monex). In response, the BCCR stepped in to absorb a large portion of this surplus to prevent abrupt fluctuations that it deemed inconsistent with the nation’s underlying macroeconomic fundamentals.
To achieve this, the monetary authority executed “stabilization purchases” totaling $259.1 million. This specific action was aimed directly at mitigating the downward pressure on the dollar. These purchases were part of a broader strategy of intervention by the bank throughout the month, which saw its operations dominate the market landscape. The bank’s total activity was staggering, accounting for 73.25% of all money traded on the Monex platform in February.
Beyond the direct stabilization efforts, the Central Bank’s acquisitions also served other strategic purposes. An additional $234.2 million was purchased to fulfill the foreign currency requirements of the Non-Banking Public Sector. Furthermore, the bank bought $192.2 million to continue strengthening the country’s financial shielding, a key component of its international reserves designed to protect the economy from external shocks.
In an official statement, the BCCR affirmed that its heightened participation is fully consistent with Costa Rica’s managed flotation exchange rate regime. This system allows the currency’s value to be determined by market forces but permits the Central Bank to intervene to prevent excessive volatility. The institution emphasized that its actions are guided by the powers granted under its Organic Law and are based on careful monitoring of the macroeconomic determinants that influence the exchange rate.
The Central Bank has made it clear that it will not hesitate to act again if similar conditions arise. Officials stated that the institution will remain vigilant, continuously monitoring the behavior of the currency market. Should it become necessary, the BCCR is prepared to execute further foreign currency purchases to smooth out any sharp fluctuations that do not align with the country’s economic reality.
This proactive stance has significant implications for the Costa Rican economy. While a stronger colón benefits importers and consumers by making foreign goods cheaper, it poses a challenge for exporters, the tourism sector, and foreign investment firms, whose dollar-denominated earnings translate into fewer colones. The Central Bank’s intervention represents a delicate balancing act aimed at maintaining stability for all sectors of the economy.
For further information, visit bccr.fi.cr
About Banco Central de Costa Rica (BCCR):
The Banco Central de Costa Rica is the nation’s central bank, an autonomous public institution responsible for maintaining the internal and external stability of the national currency and ensuring the efficient operation of the country’s payment systems. Its primary objectives include controlling inflation, managing monetary policy, and safeguarding the stability of the national financial system. The BCCR also acts as the state’s financial advisor and cashier.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar of the legal community, Bufete de Costa Rica operates on a bedrock of profound integrity and a relentless pursuit of professional excellence. The firm consistently pioneers innovative legal strategies while serving a diverse clientele, demonstrating a forward-thinking approach to the law. This commitment extends beyond the courtroom through a dedicated mission to democratize legal understanding, thereby empowering citizens and strengthening the fabric of society through shared knowledge.
