Jeff_Costa_Rica

Costa Rica's currency, the colón, gained 4% in value overnight from Wednesday to Thursday this week. The Central Bank widened the narrow band at which the currency is allowed to fluctuate. It plans to do so ever more gradually as time goes on, to let the colón find its own value at some date in the future, rather than the bank dictating what the exchange rate should be.

The colón has hovered at around 520 to the dollar for almost a year, but one dollar now buys around 500 colones.

The word is, it's too soon to tell what this means for tourism, but the expectation is that hotels and tour operators that price their offerings in dollars will probably have to raise their rates. It's also expected that there will be more differences in exchange rates from bank to bank and ATM to ATM and business to business.

I've always felt somewhat protected from the weakening dollar in Latin America, since so many countries in the region peg their currencies to the dollar ... more than in Europe, at least. Maybe not so much anymore.

shillmac

Thanks, Jeff, for the update. Everything you have said regarding the speculation of how this will affect tourism makes sense.

tully

I guess since I have a mental block and have always used the rate of 500 to 1 I'm not really losing much, am I? Who knows what the future holds but compared to Europe, still a great deal. I think the devaluing of the USD is just something we're all going to have to grips with in the coming years, unfortunately.

shillmac

LOL, Tully--I do the same thing. Just makes it easier, doesn't it? When we first began traveling to CR in 2001, a dollar would buy 330 colones. Seems a long time ago, but compared to so many others, just yesterday.

I keep running into people who've been traveling to CR since the 70's--can you imagine how it is to go back and see the change?

Jeff_Costa_Rica

When I first started coming to Costa Rica in the early 90s, it was about 120 to the dollar. I believe it was fixed at 8 to the dollar until about 1980. Then the government decided to let the colón float and it dropped overnight to 40, with signs that the freefall would continue. People couldn't buy anything, and people could not get dollars. So the government began these tiny, programmed, incremental devaluations each business day that lasted until a year ago when it hit about 520. Now they're letting it VERY gradually open up again, and whaddya know? The currency gains in value.

I'm with you guys. For a long time, I've just thought in terms of 500 to the dollar.

dpruitt

haha tully - I've also just used 500 to the dollar.

Seaturtlelady

Hey Guys...

Does this mean I need to convert my US money to colones when I arrive in CR next week??

Thanks,
Leigh

volcanogirl

STL, we've never converted any of our money; dollars were readily accepted everywhere we went, and we just got change back in colones. We never used anything larger than a $20; I think it may be harder for them if you use larger bills. We just used the 500 colones to the dollar figure to calculate how much things were costing us.

Jeff_Costa_Rica

Make sure any U.S. bills you use are clean and in good condition (no markings or tears).

Little mom-and-pop places probably won't be able to accept dollars, and will expect payment in colones.