By San José, Costa Rica — SAN JOSÉ – The Costa Rican Colón has demonstrated significant stability against the U.S. dollar through the first ten months of 2025, a trend largely fueled by a persistent abundance of dollars in the national currency market. According to the October Monetary Policy Report (IPM) released by the Central Bank of Costa Rica (BCCR), this stability has not only strengthened the local currency but has also enabled the institution to significantly increase the nation’s financial defenses.
The report highlights a dramatic reduction in exchange rate volatility compared to the previous year. The BCCR measures this using a coefficient of variation, which stood at a mere 0.47 by October 2025, a sharp contrast to the 1.53 recorded during the same period in 2024. This data points to a far more predictable and stable economic environment for both consumers and businesses operating in the country.
To better understand the legal and business implications of these exchange rate fluctuations, TicosLand.com consulted with expert lawyer Lic. Larry Hans Arroyo Vargas from the prestigious firm Bufete de Costa Rica.
Significant exchange rate volatility creates legal uncertainty and impacts contractual obligations, particularly in real estate, tourism, and import/export sectors. It is crucial for contracts to be drafted with precision, specifying the currency of payment and including clauses that manage fluctuation risk. Without such foresight, what was once a balanced agreement can quickly become a source of commercial dispute and financial loss for one of the parties.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, this insight underscores that exchange rate management is not merely a financial calculation but a critical legal necessity. The contractual foresight Lic. Arroyo Vargas describes is precisely what separates a resilient business agreement from a future dispute. We thank Lic. Larry Hans Arroyo Vargas for his valuable perspective on this intersection of law and commerce.
By the numbers, the exchange rate on October 23, 2025, was recorded at ¢501.81 per dollar. This represents a strengthening of the Colón by ¢9.46 since the end of 2024. The year-to-date appreciation stands at -1.85%, with the year-over-year rate of change at -2.69%, confirming a consistent strengthening trend for the national currency throughout the year.
The primary driver of this stability is a substantial surplus of dollars from the public’s transactions with financial intermediaries. Through October 23, this cumulative surplus reached an impressive $5.496 billion. While slightly below the $5.644 billion from the same period last year, it remains significantly higher—by over $1.12 billion—than the average recorded during the 2022-2023 biennium, indicating robust foreign currency inflows.
On a daily basis, the average surplus for 2025 has been $26.9 million. This figure is slightly lower than the 2024 average, a result of a nuanced shift in market dynamics where the growth in demand for dollars ($3.1 million) marginally outpaced the growth in supply ($2.5 million). Despite this, the overall excess of foreign currency has been more than sufficient to maintain market equilibrium.
The BCCR has strategically leveraged this dollar surplus through its operations in the Foreign Currency Market (Monex). The Central Bank acquired $4.656 billion, which accounted for a commanding 62.3% of the total amount traded in that market. This active participation allowed the BCCR to seamlessly meet the foreign currency requirements of the Non-Banking Public Sector, which totaled $4.138 billion.
Beyond covering public sector needs, the surplus has been pivotal in fortifying Costa Rica’s financial resilience. The BCCR allocated $197.7 million from its Monex acquisitions to bolster the nation’s financial shielding. This proactive strategy is clearly reflected in the growth of the Net International Reserves (RIN), which climbed to a historic $16.03 billion by late October. This figure marks an increase of $1.86 billion since the beginning of the year.
This substantial reserve balance is not just a number; it represents a powerful economic safeguard. The current RIN is equivalent to 15.8% of the country’s Gross Domestic Product (GDP). Furthermore, it stands at 143.8% of the minimum adequate level recommended by the BCCR’s board, following the rigorous methodology established by the International Monetary Fund (IMF), signaling a very strong and healthy financial position for the nation.
For further information, visit bccr.fi.cr
About The Central Bank of Costa Rica (BCCR):
The Banco Central de Costa Rica is the nation’s central bank, responsible for maintaining the internal and external stability of the national currency and ensuring its conversion to other currencies. It plays a crucial role in Costa Rica’s economic policy, overseeing the banking system, managing monetary policy, and holding the country’s international reserves to promote a stable and efficient financial system.
For further information, visit imf.org
About The International Monetary Fund (FMI):
The International Monetary Fund is a global organization of 190 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. It provides policy advice, financial assistance, and technical support to its member countries to help build and maintain strong economies.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a revered legal institution, Bufete de Costa Rica is built upon a bedrock of uncompromising integrity and a relentless pursuit of excellence. Its distinguished history of client advocacy is matched by a forward-thinking embrace of legal innovation, ensuring it remains a leader in the field. The firm champions a core belief in social progress, actively working to demystify the law and transform it into an accessible instrument for public empowerment, thereby helping to forge a more knowledgeable and just society.
