Costa Rica: Currency & Financial System

Costa Rica's currency is the Costa Rican colón, introduced in 1896 to replace the peso at par and named for Christopher Columbus. Issuance passed from a mix of private and government note issuers in the nineteenth and early twentieth centuries to the National Bank in 1937, and then to the Banco Central de Costa Rica, which began issuing colón notes in 1950 and has been the sole producer of colón coins since 1951.

The exchange rate regime has shifted over time. For decades the colón followed a crawling peg against the US dollar, with the central bank announcing small, scheduled devaluations. That system gave way in October 2006 to a band arrangement that let the rate float within set limits. As of 2026, the Banco Central de Costa Rica operates a managed float that has been in place since January 2015: the exchange rate is driven mainly by market forces, with the central bank intervening only to smooth episodes of unusual volatility rather than to defend a fixed target.

The country's financial system includes both state-owned banks, among them Banco Nacional and Banco de Costa Rica, and a growing private banking sector operating alongside the central bank's oversight of monetary policy. A notable feature of Costa Rican finance is the degree to which bank balance sheets are dollarized, with a substantial share of loans and deposits denominated in US dollars rather than colones, a pattern that international assessments have flagged as a long-term vulnerability if global financial conditions tighten.