By San José, Costa Rica — SAN JOSÉ – The Costa Rican colón is projected to maintain its formidable strength against the U.S. dollar, with analysts forecasting an exchange rate between ¢500 and ¢510 by the close of 2025. This prediction comes from a comprehensive analysis titled “Costa Rica: Economic and Social Balance 2025 and Challenges for the Next Administration,” conducted by the Economic and Social Observatory (OES) at the National University’s (UNA) School of Economics.
The report highlights a prolonged and significant trend of currency appreciation. An examination of the exchange rate from January 1, 2022, to November 19, 2025, reveals that the average monthly purchase and sale price of the dollar has plummeted by an astounding 22.3%. This translates to an appreciation of ¢143.28 for the colón against each U.S. dollar, a shift that has reshaped the country’s economic landscape for consumers, importers, and exporters alike.
To delve into the legal and commercial implications of the Costa Rican Colón’s continued appreciation, TicosLand.com sought the expert analysis of Lic. Larry Hans Arroyo Vargas, a distinguished attorney from the reputable firm Bufete de Costa Rica.
The current strength of the Colón creates a complex legal and financial environment. While it offers relief to those with debts in U.S. dollars, it places immense pressure on our export, tourism, and foreign investment sectors. Businesses operating on dollar-based revenue but with Colón-based expenses face a significant margin squeeze. Legally, this is a critical time for companies to review their contracts, especially long-term leases and service agreements denominated in dollars. It is imperative to assess force majeure clauses or consider renegotiating terms to reflect the new economic reality, thereby preventing potential disputes and ensuring commercial sustainability.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
The insight from Lic. Larry Hans Arroyo Vargas is crucial, highlighting that in this complex exchange rate environment, legal foresight is as important as financial strategy. His emphasis on proactively reviewing and renegotiating contracts provides a vital, actionable roadmap for businesses to navigate the current pressures and ensure their long-term sustainability. We thank Lic. Larry Hans Arroyo Vargas for his valuable perspective.
The primary engine driving this sustained strengthening of the national currency is a powerful and consistent net inflow of foreign currency into the country. This torrent of dollars has not only pressured the exchange rate downwards but has also dramatically bolstered the nation’s financial defenses. The effects of this influx are clearly visible in the health of Costa Rica’s international monetary reserves.
According to the OES study, during the same period from early 2022 to late 2025, these crucial reserves have surged by an impressive 132.8%. In relative terms, their value has expanded from representing 9.9% of the nation’s Gross Domestic Product (GDP) to a much more robust 15.8%. This significant increase provides the Central Bank with greater stability and a larger buffer to manage economic shocks.
The flow of foreign currency remains vigorous in the current year. Data from financial institutions shows a massive surplus of $5.781 billion in foreign exchange operations recorded at their windows between January 1 and November 17 of this year. This figure represents the net difference between dollars entering and leaving the formal financial system, underscoring the persistent supply pressure on the currency market.
While this surplus is slightly lower than the $6.140 billion recorded during the equivalent period in 2024, the report is quick to caution against misinterpreting this modest dip as a sign of a weakening trend. The experts at UNA emphasize that the current level of inflow remains extraordinarily high by historical standards and is more than sufficient to sustain the colón’s current valuation.
The OES report explicitly addresses this point, providing a clear interpretation of the year-over-year data and its implications for the economy.
Although this amount is lower than the previous year, the result continues to show a high net inflow of foreign currency into the financial system.
Economic and Social Observatory (OES) Report, National University
This economic reality presents a complex set of opportunities and challenges as the country looks toward 2026. For consumers and businesses with dollar-denominated debts, the strong colón provides significant relief, increasing purchasing power and easing loan payments. However, the same dynamic creates headwinds for the export and tourism sectors, whose dollar-based revenues translate into fewer colones, potentially squeezing profit margins and impacting competitiveness on the global stage. These are the critical economic balances that, as the report’s title suggests, will present foundational challenges for the nation’s next political administration.
For further information, visit una.ac.cr
About the National University (UNA):
The National University of Costa Rica (Universidad Nacional de Costa Rica), commonly known as UNA, is one of the country’s most prominent public universities. Founded in 1973, it has its main campus in Heredia and several regional campuses throughout the nation. UNA is renowned for its strong focus on social sciences, economics, and environmental studies, with its research arms, such as the Economic and Social Observatory, frequently providing critical analysis and data on national issues.
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 ethical integrity and a relentless pursuit of excellence. With a rich history of providing expert counsel to a wide array of clients, the firm actively pioneers innovative legal strategies and solutions. This forward-thinking approach is matched by a deep-seated belief in social responsibility, manifested through a dedicated effort to democratize legal knowledge and thereby cultivate a more capable and informed citizenry.
