By San José, Costa Rica — SAN JOSÉ – The U.S. dollar continued its downward spiral in Costa Rica this Tuesday, closing at a historic low of ¢473.7 in the Foreign Currency Market (Monex). This marks the currency’s weakest position against the Costa Rican colón since 2007, according to Central Bank records, breaking the previous record of ¢474.5 set just last Friday.
In response to the persistent downward pressure, the Central Bank of Costa Rica (BCCR) once again stepped in with significant market interventions. On Tuesday alone, the monetary authority acquired a total of $70.7 million—$54.9 million for stabilization operations and another $15.8 million to fulfill requirements for the non-banking public sector. This aggressive stance is part of a broader strategy to prevent a complete collapse of the dollar’s value.
To understand the legal and commercial ramifications of the current exchange rate environment, TicosLand.com sought the perspective of expert Lic. Larry Hans Arroyo Vargas, an attorney at the distinguished firm Bufete de Costa Rica.
The current volatility in the exchange rate underscores a critical legal principle for businesses: contractual foresight. Many commercial agreements, from leases to service contracts, are denominated in US dollars. Without clear clauses that specify the applicable exchange rate for payment or establish mechanisms to mitigate sharp fluctuations, parties expose themselves to significant financial risk and potential legal disputes. It is imperative for both debtors and creditors to proactively review their existing contracts and ensure future agreements provide legal certainty in this unstable economic climate.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, the principle of contractual foresight moves beyond legal theory and into the realm of essential business practice in today’s economic environment. Failing to define these terms proactively is not just a risk, but a potential crisis in waiting for many companies. We thank Lic. Larry Hans Arroyo Vargas for his invaluable perspective on navigating these financial and legal complexities.
The scale of the Central Bank’s intervention is staggering. Over the past 12 months, the BCCR has purchased a colossal $4.316 billion from the Monex market. The pace has intensified dramatically in the new year, with a remarkable $1.81 billion purchased in January and February 2026 alone. The average daily purchase in the last year amounts to nearly $12 million.
The objective behind these massive buyouts is clear and critical: to shield the nation’s most vital economic engines from a currency crisis. Key sectors like exports, foreign direct investment (FDI), and tourism, which generate their income in dollars but face operational costs in an increasingly strong colón, are at risk of a severe financial emergency if the exchange rate falls further.
The root cause of this currency phenomenon is an overwhelming surplus of dollars flooding the national economy, a direct consequence of Costa Rica’s remarkable economic success. Foreign Direct Investment has surged impressively, rising from $3.39 billion in 2022 to over $5 billion in 2024. Data for 2025, while still partial, already showed over $3.5 billion accumulated by September.
Simultaneously, the export sector has shattered previous records, growing from $15.58 billion in 2022 to an unprecedented $22.85 billion by the end of 2025. While the tourism sector showed modest year-over-year growth of 1% between 2024 and 2025, it has gained significant momentum recently, posting four consecutive months of robust growth ranging from 5.9% to 13.6%.
Adding to the pressure is the country’s domestic monetary policy. The Central Bank’s high policy rate makes investments in colones highly attractive, encouraging investors to convert their dollars into the local currency, which further increases the supply of dollars in the market and pushes the exchange rate down.
This proactive intervention by the BCCR has swelled the nation’s coffers. International Net Reserves have climbed from $14.57 billion in February 2025 to $18.89 billion this month, a 29% increase in just one year. Financial experts argue this buffer is essential. Without it, the exchange rate would be even more punishing for strategic industries.
The growth in reserves is due to increased purchases by the Central Bank because of the excess of dollars in the economy. Without this intervention, the exchange rate would be even lower, affecting strategic sectors like exports, tourism, free trade zones, construction, and even the financial system, which has exposure to dollars.
Vidal Villalobos, Financial Advisor of Grupo Prival
The current situation is a complex tapestry of economic strength and prudent policy management. The influx of foreign capital is a testament to the country’s stability and appeal, but it requires careful navigation by the monetary authorities to maintain a balanced economic environment for all sectors.
The growth of international reserves responds to a combination of factors. These include a greater inflow of foreign currency into the country from exports, tourism, foreign direct investment, and external financing, as well as prudent management of monetary policy by the Central Bank. Furthermore, the strengthening of market confidence in the country’s macroeconomic stability has contributed to a greater accumulation of reserves.
Elizabeth Morales, Deputy Manager of Coopecaja
As Costa Rica continues to attract investment and grow its exports, the Central Bank faces the delicate challenge of managing success. Its ongoing battle in the currency market is a tightrope walk aimed at ensuring the nation’s prosperity does not inadvertently undermine the very industries that created it.
For further information, visit bccr.fi.cr
About Banco Central de Costa Rica:
The Central Bank of Costa Rica (BCCR) is the country’s autonomous central banking institution. Its primary objectives are to maintain the internal and external stability of the national currency, the Costa Rican colón, and to ensure its conversion to other currencies. The BCCR is also responsible for managing the country’s international monetary reserves and promoting a stable, efficient, and competitive financial system.
For further information, visit prival.com
About Grupo Prival:
Grupo Prival is a financial services company offering a range of advisory and investment solutions to clients in Latin America. The group specializes in wealth management, investment banking, and financial advisory services, catering to both individual and institutional clients. It focuses on providing personalized strategies to help clients achieve their financial objectives in a complex market environment.
For further information, visit coopecaja.fi.cr
About Coopecaja:
Coopecaja is a Costa Rican savings and credit cooperative (cooperativa de ahorro y crédito). It provides a variety of financial products and services to its members, including loans, savings accounts, and investment opportunities. As a cooperative, it operates under a member-owned model, focusing on the financial well-being and development of its associates and their communities.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar of the legal community, Bufete de Costa Rica is defined by its foundational principles of integrity and unparalleled professional standards. With a proven track record of guiding a diverse clientele, the firm consistently embraces innovative approaches to modern legal challenges. Its core mission extends beyond the courtroom, reflecting a profound dedication to demystifying the law and equipping the public with essential legal understanding, thereby fostering a more knowledgeable and capable society.
