Dec 5, 2025
The recent strengthening of the colón is the result of a combination of forces: higher inflows of foreign currency from tourism and exports, sustained macroeconomic stability projected by the BCCR, a resilient inflow of foreign direct investment, and a cautious monetary policy stance. External conditions —such as more stable international interest rates— have also reduced pressure on the local demand for US dollars.
Positive impacts for Costa Rican businesses
The appreciation of the colón provides immediate benefits for companies that depend heavily on imported goods or foreign-currency-denominated inputs. Lower import costs can translate into improved operating margins where pricing strategies remain unchanged. Likewise, US-dollar debt becomes less expensive when converted to colones, reducing interest burdens and improving indicators such as coverage ratios and free cash flow.
For industries like manufacturing, wholesale distribution and retail, the current exchange rate presents an opportunity to renegotiate contracts, adjust procurement cycles or accelerate strategic purchases.
Risks and challenges for companies exposed to the US dollar
Conversely, the appreciation of the colón creates headwinds for companies with revenues in dollars or significant export activity. A stronger local currency reduces the international competitiveness of Costa Rican goods and services, compresses margins when revenues are denominated in USD but expenses are in colones, and increases uncertainty in pricing strategies.
Tourism —one of Costa Rica’s primary sources of foreign currency— illustrates the challenge. While visitor arrivals remain strong, the conversion of USD revenues into colones has diminished the effective income for several hotels and tourism operators. The Costa Rican Chamber of Hotels (CCH) has repeatedly emphasized that the stronger colón is pressuring sector profitability and limiting reinvestment capacity.
Accounting and tax implications
From an accounting perspective, exchange-rate volatility requires strict application of IAS 21 – Effects of Changes in Foreign Exchange Rates when preparing financial statements. This includes accurate conversion of monetary items, valuation of foreign-currency liabilities, and recognition of exchange differences in profit or loss.
From a tax perspective, although Costa Rica follows a territorial income system, valuation in foreign currency affects the determination of deductible costs, taxable income and timing differences, potentially altering the corporate income tax base. Companies must strengthen fiscal reconciliations and underlying documentation for transactions in USD or mixed currency environments.
Financial management and 2026 outlook
Whether the stronger colón continues into 2026 will depend on variables such as tourism inflows, export dynamics, US Federal Reserve decisions, global economic conditions and domestic monetary policy. If the current trend persists, companies will need to adjust cost structures, pricing models, debt strategies and currency-risk policies.
Key actions include reviewing financing currency mix, renegotiating contracts with suppliers and clients, implementing internal FX-risk policies, exploring hedging instruments when suitable, and incorporating multi-scenario modeling into financial planning.
The strengthening of the colón against the US dollar has created a mixed but strategically significant environment for companies operating in Costa Rica. While the trend benefits import-dependent sectors, it challenges exporters and businesses with USD-denominated revenues. The core priority for 2026 will be anticipating the financial effects rather than reacting to them: integrating FX analysis into strategic planning, adjusting cost structures, refining pricing models and strengthening financial governance.
Costa Rica closes 2025 with macroeconomic stability, a historically strong currency and a neutral-to-mixed outlook for businesses. Organizations that interpret this environment correctly will be better positioned to protect margins, optimize cash flows and make informed investment decisions.
Sources
Central Bank of Costa Rica (BCCR): Historical exchange-rate data 2024–2025.
El Financiero (2025): “El valor del dólar alcanza su nivel más bajo desde 2008.”
Costa Rican Chamber of Hotels (CCH): Sector analysis and public statements.
2025 sector reports: tourism, exports and foreign-exchange flows.