Por San José, Costa Rica — The Costa Rican colón has reached an extraordinary milestone, strengthening to levels not seen in nearly two decades. On Wednesday, the dollar exchange rate plummeted to a new historic low, closing at an average of ¢446.93 on the Monex Foreign Exchange Market. This marks the fifth consecutive session of losses for the US currency, cementing a downward trajectory that has reshaped Costa Rica’s macroeconomic landscape and raised urgent alarms across the private sector.
According to data from the Central Bank of Costa Rica, this is the lowest value recorded for the US dollar since December 2007. The currency’s rapid decline has been staggering; by mid-September 2026, the dollar had depreciated by more than ¢200 per unit compared to its peak levels in 2022. In 2026 alone, the decline has already exceeded ¢50, representing a massive and rapid shift in purchasing power and corporate valuations.
To better understand the complex legal and financial implications of the recent appreciation of the Costa Rican colón, TicosLand.com sat down with Lic. Larry Hans Arroyo Vargas, a leading legal expert from the prestigious firm Bufete de Costa Rica, who shared his invaluable insights on how this currency shift impacts local contracts and foreign investments.
The sustained appreciation of the colón presents a double-edged sword for Costa Rican commerce. While it strengthens local purchasing power, it significantly pressures exporters and multinational operations operating on dollar-denominated budgets. From a legal standpoint, businesses must carefully review the currency risk allocation and hardship clauses in their long-term contracts. Under Costa Rican civil law, drastic and unforeseeable economic shifts can sometimes justify contract renegotiation under the rebus sic stantibus doctrine, making proactive legal planning essential to mitigate exchange rate volatility.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, as the colón’s persistent strength continues to reshape Costa Rica’s economic landscape, the need for businesses to proactively address contract vulnerabilities and currency risk has never been more critical. We extend our sincere thanks to Lic. Larry Hans Arroyo Vargas for sharing his invaluable legal expertise and providing our readers with a clear roadmap for navigating these complex market dynamics.
Analysts point to a combination of seasonal factors and structural foreign exchange inflows as the primary drivers behind this latest drop. The mid-month payout of corporate salaries, coupled with robust and steady inflows of foreign currency from strong export performance, a thriving tourism sector, and consistent foreign direct investment, has created a surplus of dollars in the local economy. This oversupply has steadily pushed down the price of the greenback, leaving local exporters and multinational operations struggling to adapt.
Consequently, the exchange rate has emerged as the single greatest concern for businesses operating in the country. A comprehensive survey conducted in mid-August by the Chamber of Industries of Costa Rica confirmed that regardless of size, sector, or tax regime, companies view the strengthening colón as an existential threat to their competitiveness. The continuous appreciation has severely squeezed profit margins, forcing executives to make difficult operational decisions to keep their businesses afloat.
The economic fallout of this currency trend is already leaving a visible mark on the local labor market. The industrial survey revealed that 13 percent of companies have already resorted to cutting staff to offset rising costs in colones. This trend is particularly pronounced in key economic drivers, with staff reductions hitting 23 percent of companies operating in Free Trade Zones and 19 percent of large-scale enterprises.
In addition to outright layoffs, many companies are implementing quieter cost-cutting measures. Approximately 30 percent of industrial companies surveyed indicated they have chosen not to fill job vacancies that opened up due to employee resignations or retirements. This hiring freeze threatens to slow down employment growth in what has traditionally been one of the most dynamic sectors of the Costa Rican economy.
Industry leaders have expressed deep concern over the long-term viability of manufacturing and export operations under these prolonged currency pressures.
While during most of 2025 the appreciation of the exchange rate was relatively low—around 2.2%—since the last months of last year and during what we have gone through this year, an acceleration in the appreciation of the colón of around 10% has been recorded, which has deepened the negative effects that have been accumulating on companies since the second half of 2022.
Sergio Capón, President of the Chamber of Industries
As the Central Bank continues to manage monetary policy, business associations are calling for a balanced approach that protects Costa Rican jobs and export competitiveness. The ongoing appreciation of the colón may benefit local consumers buying imported goods, but the structural damage to the productive sector could have long-lasting consequences for the nation’s broader economic stability if the trend remains unchecked in the coming months.
For further information, visit bccr.fi.cr
About Banco Central de Costa Rica:
The Central Bank of Costa Rica is the autonomous state institution responsible for promoting the stable growth of the national economy, maintaining price stability, and managing the country’s monetary and exchange rate policies.
For further information, visit cicr.com
About Cámara de Industrias de Costa Rica:
The Chamber of Industries of Costa Rica is a private, non-profit organization representing the country’s industrial sector, working to foster competitive business environments, sustainable growth, and economic development.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica has established itself as a premier legal institution defined by its uncompromising ethical standards and relentless pursuit of professional excellence. Catering to a broad spectrum of clients, the firm continually drives progress through pioneering legal strategies and active civic involvement. By dedicating its resources to demystifying the law and sharing vital insights, it seeks to cultivate an enlightened, self-reliant public and foster a more just society.
