Mar 23, 2026
By MBA Fernando Campos, Director
The issue is not invoicing in dollars. The issue is having built the financial model on the premise that the colón would always tend to depreciate. The environment shows that this assumption can no longer continue to be the basis of the budget.
Costa Rica comes from a period of particularly low inflation. INEC reported for January 2026 a year-on-year CPI variation of -2.53%, reflecting stability and even reduction in some domestic prices. This means that the cost structure in colones is not being pressured by generalized inflation.
By contrast, the United States has shown year-on-year inflation close to 2%–3% according to the Consumer Price Index (CPI) of the Bureau of Labor Statistics, while Western Europe has remained around 1%–2% according to Eurostat. This defines that international clients do operate in economies with sustained positive inflation and are accustomed to prices moving upward.
It is important to understand that the dollar does not move only because of exports or tourism. International interest rates, Federal Reserve monetary policy, yield differentials, and capital flows directly influence exchange rate behavior. In an environment of local macroeconomic stability and competitive rates, the colón may remain strong for prolonged periods.
The Company’s or Individual’s Foreign Exchange Exposure: The Central Point
The risk is not in the specific level of the dollar, but in the foreign exchange exposure that the company or business unit has when the currency of income does not coincide with the currency of expenses.
If billing is in dollars, but payroll, rent, utilities, and most suppliers are in colones, the margin depends directly on the exchange rate. In a strong colón environment, each converted dollar generates fewer colones. If costs remain the same, profit is reduced, even if the sales volume has not changed.
This effect is amplified when there is dependence on monthly conversion to cover local expenses. In that scenario, the currency of indebtedness becomes decisive.
If the company bills in dollars and the debt is in colones, a strong colón can tighten cash flow, because each converted dollar yields fewer colones while the installment in colones remains the same. If it bills and is indebted in dollars, the installment does not change; however, when converting that income into colones, there will be less available to cover local operating expenses.
By contrast, if the company bills in colones and has debt in dollars, the appreciation of the colón benefits it, because the installment in dollars becomes cheaper when converted into colones. The correct analysis is not only how much is owed, but in what currency it is owed and with what cash flow it is paid.
The Decision To Increase Prices
Increasing prices may form part of the solution, but it should not be an automatic reaction every time the exchange rate moves. When the colón strengthens and the margin begins to narrow, it is natural to think about passing that difference on to the client. However, a rushed decision may affect volume more than it improves profitability.
Before adjusting rates, it is advisable to ask four very specific questions:
How price-sensitive is the client and how much competition exists?
Does inflation in the client’s country support a reasonable technical adjustment?
If budgeting were done with a slightly lower exchange rate, would the company still be profitable?
Does the international economic context favor an increase or recommend prudence?
In highly competitive markets, such as tourism in Costa Rica, suddenly passing on the accumulated exchange rate variation may end up affecting occupancy or contracts. In differentiated or high value-added activities, gradual and technically supported adjustments are usually better absorbed.
The 2026 environment confirms that automatic depreciation of the colón can no longer continue to be part of the business model. Responsible financial management requires analyzing foreign exchange exposure, debt currency, and demand elasticity before making pricing decisions.
Official References
Central Bank of Costa Rica (BCCR) – Economic indicators and historical exchange rate series.
National Institute of Statistics and Census (INEC) – Consumer Price Index January 2026 (-2.53% year-on-year).
U.S. Bureau of Labor Statistics (BLS) – Consumer Price Index January 2026 (2.4% year-on-year).
Eurostat – Euro Area Annual Inflation January 2026 (1.7%).