The decision to raise prices in dollars in an environment of a strong colón.

By MBA. Fernando Campo.

Director EAS LATAM

In Costa Rican companies, billing remains the same, but invoices are still issued in dollars. However, when those revenues are converted to colones, they no longer yield the same returns. This isn't just a subjective perception. In 2022, the exchange rate exceeded 650 colones per dollar at certain times; currently, the market has stabilized around 470 colones, according to indicators from the Central Bank of Costa Rica (BCCR). This difference of over 180 colones per dollar completely transforms the profit margin structure of any business whose expenses are primarily in colones.

The problem isn't billing in dollars. The problem is having built the financial model on the premise that the colón would always tend to depreciate. The current situation demonstrates that this assumption can no longer be the basis for budgeting.

Costa Rica has just come from a period of particularly low inflation. The National Institute of Statistics and Censuses (INEC) reported a year-on-year change in the Consumer Price Index (CPI) of -2.53% for January 2026, reflecting stability and even a decrease in some domestic prices. This means that the cost structure in colones is not being pressured by generalized inflation.

In contrast, the United States has shown year-on-year inflation of around 2–3% according to the Bureau of Labor Statistics' Consumer Price Index (CPI), while Western Europe has remained around 1–2% according to Eurostat. This indicates that international clients do operate in economies with sustained positive inflation and are accustomed to rising prices.

It's important to understand that the dollar's value isn't solely determined by exports or tourism. International interest rates, the Federal Reserve's monetary policy, yield differentials, and capital flows directly influence exchange rate behavior. In an environment of local macroeconomic stability and competitive interest rates, the colón can remain strong for extended periods.

The foreign exchange exposure of the company or individual: the central point

The risk lies not in the specific level of the dollar, but in the exchange rate exposure that the company or unit has when the currency of the income does not match the currency of the expenses.

If you invoice in dollars, but payroll, rent, utilities, and most suppliers charge in colones, your profit margin depends directly on the exchange rate. In a strong colón environment, each dollar converted generates fewer colones. If costs remain the same, profit decreases, even if sales volume hasn't changed.

This effect is amplified when there is a reliance on monthly currency conversion to cover local expenses. In that scenario, the currency of the debt becomes a determining factor.

If a company invoices in dollars and its debt is in colones, the strong colone can strain cash flow because each dollar converted to dollars yields fewer colones while the installment payment in colones remains the same. If both invoice and owe are in dollars, the installment payment doesn't change; however, converting that revenue to colones will leave less available to cover local operating expenses.

Conversely, if a company invoices in colones and has debt in dollars, the appreciation of the colón benefits it, because the dollar installment becomes cheaper when converted to colones. The correct analysis is not only about how much is owed, but also about the currency in which it is owed and the cash flow used for repayment.

The decision to raise prices

Raising prices can be part of the solution, but it shouldn't be an automatic reaction every time the exchange rate fluctuates. When the colón strengthens and profit margins start to tighten, it's natural to think about passing that difference on to the customer. However, a hasty decision can negatively impact volume more than it improves profitability.

Before adjusting rates, it is advisable to ask yourself four very specific questions:

1. How price-sensitive is the customer and how much competition is there?

2. Does inflation in the client's country support a reasonable technical adjustment?

3. If the budget were calculated using a slightly lower exchange rate, would the company still be profitable?

4. Does the current international economic climate favor an increase or recommend caution?

   
   

In highly competitive markets, such as tourism in Costa Rica, suddenly passing on accumulated exchange rate fluctuations can negatively impact occupancy rates or contracts. In differentiated or high value-added activities, gradual and technically sound adjustments are generally better absorbed.

The 2026 environment confirms that the automatic depreciation of the colón can no longer be part of the business model. Responsible financial management requires analyzing exchange rate exposure, the currency of debt, and demand elasticity before making pricing adjustment decisions.

Official references

• Central Bank of Costa Rica (BCCR) – Economic indicators and historical exchange rate series.

• National Institute of Statistics and Censuses (INEC) – Consumer Price Index January 2026 (-2.53% year-on-year).

• US Bureau of Labor Statistics (BLS) – Consumer Price Index January 2026 (2.4% year-on-year).

• Eurostat – Euro Area Annual Inflation January 2026 (1.7%) .