www.CostaRicaTicas.com

I'll be coming down in two weeks and have been tracking the exchange rate since about this time last year. I noticed that the dollar is steadily gaining value and closing in on 600 colones = 1 dollar. I just wondered if anyone out there knows what the highest and lowest the exchange rate has been in the last twenty years. It seems 590 colones to the dollar is high vs. what I've seen in the last year, but I was curious if this is also historically a good exchange rate going back many years further. Could it be that now - economically speaking - is the best time EVER to visit Costa Rica and get a great deal for your dollar? Also, even if this is not the case, what's the lowest exchange rate in the last 20 years, meaning how much better of a deal is it for Americans to go down to CR now than compared to the "worst" it's ever been? I looked for answers via prior posts here and on a few currency converter sites, but unable to find one which listed historical data so was hoping a regular on this board who has also lived in Costa Rica for several years could answer through first-hand memory/knowledge of the subject. Thanks!

That's a hard question to answer because you are looking strictly at exchange rate without considering inflation. Your question is really about buying power, whether you could buy more with ¢400 (in 2005) or with ¢585 now? Only a long-time resident could answer that accurately.

Right now, at ~585, that's the highest rate ever I believe. But prices have been rising at 10+% per year.

Coincidentally, chicas were asking cien in 2005 at HDR and they're still asking cien at the HDR. The difference is that back then you could get 95% of the them down to $70-75, but now you may be able to get maybe half of them down to that.

The exchange rate was around 230 CRC/USD back in 2000 when I first started going to CR and has been rising more or less steadily at least that far back. So, I can't imagine the rate of exchange was ever higher than it is now.

HOWEVER, your suggestion that means that our buying power has changed correspondingly is overly simplistic and overlooks the many other factors that go into it. It does NOT AT ALL mean that now is the best time EVER to visit Costa Rica and get a great deal for your dollar.

One thing that you have to keep in mind is that a large reason for the devaluation of the CR currency is local inflation. So, while your dollar may now buy more colones, it also now takes more colones to buy local goods and services. Ironically, part of that is due to the devaluation itself since imports make a much larger portion of the CR economy than it does in the US and it now takes more colones to purchase all those imports which are priced in dollars. From that perspective, its really more or less a "wash". Our dollars may buy twice as many colones as they did 7-8 years ago but it also now costs twice as many colones for most things in CR than it did back then, so your cost in dollars is basically about the same.

Even more importantly for all of us is the fact that the worst of that inflation may actually be in the areas we're most likely to spend money. Chicas have been asking Cien for years and its hard to say how much what they actually get paid has changed, but that cost area actually may have gone down relative to the overall inflation rate. However, in most other areas the amounts that they charge tourists have gone up much faster than even overall inflation. For example, back in 2000 it cost me $17 for an all day pass to Tabacon. Today, the same pass costs $70 (though that does also include a meal that wasn't included back in 2000). A Pacuare raft trip cost about $60 back then. Today it is closer to $100. Similarly, hotel prices have gone up considerably. For a long time, one could get a room at the Morazon for about $32/nt. Now I believe it costs around $45/nt. And don't get me started on the HDR which has always been overpriced but has gone from about $50/nt to close to $100. Airfares are subject to very complex economic forces, but just a couple of years ago it was not impossible to get a r/t fare from Tampa to CR for just $250. Today, if you can get a ticket in the $330-340 range you think you've gotten a pretty good deal.

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Orange beat me to the punch answering your question while I was typing this out.

Check out this, it will give you a max range of 500 days as far back as 1990.

http://www.oanda.com/convert/fxhistory

Pro,

In the long run I think it equals out. In the short run when the dollar is gaining, prices do not move as quickly in colones. In general the inflation works to our advantage if we have/make dollars. This is another reason to exchange dollars and purchase as much as possible in colones.

BKTUNA
I am never going home

So generally speaking, from the answers I've seen it seems that the current exchange rate being 600 colones to the dollar would not really offer Americans any more or less buying power than say (for instance) early May 2008 when it was at 500 colones/dollar? Is that more or less the case?

That website isn't good for looking at the exchange rate because I believe they show the sell (ask) rate, not the buy (bid) rate. They don't show how many colones you buy for each dollar. They show how many colones it will take to buy a dollar back. It's higher than the buy rate.

Today, it shows ¢596. That is the sell rate, but not the buy rate. The official buy rate is ¢586 today.

http://www.bncr.fi.cr

Generally speaking, that's right. For things priced in Colones, inflation is a given in order to keep up with the falling value of the Colon. But seriously, the exchange rate (assuming you don't change money at the airport, which is a rip off) should not affect how much you end up spending in USD$ equivalent.

_________________
"The only normal people are those you don't know very well." Joe Ancis

The highest i've seen is about 593 to the dollar. But as other say, it doesn't help that much because prices have steadily been going up.

Actually on the regular daily converter part of that site they give both the bid and ask rates. It's true that they only provide the ask rate on the historical tables but the range between bid and ask is normally only about 3-3.5% or about 20 colones which should be more than close enough for the purposes of our simple analysis. IMHO, the larger pain in the ass for doing our longitudinal analysis is that it only provided data in 500 day increments, so that one would have to enter multiple date ranges and resubmit the form several times in order to compile the complete data for the last 20 years.

Are you sure? All I see is the ask rate for USD/CRC and flipped CRC/USD.

This is what I'm looking at: http://www.oanda.com/convert/fxdaily

No biggie.

Here is the link I have in my bookmarks: http://www.oanda.com/convert/classic

Just type in CRC and USD into the currency code boxes rather than using the dropdown list (there are just too many currency codes to scroll through even if they are alphabetical) and then click convert now. I guess the converter classic provides better info the fxdaily

My 1st time down to CR I got 85 colones to the dollar. 5 colones paper bills and 1 colones coins as big as the 20 colones coins everything seemed pretty cheap back then you could get a couple beers for a buck or less.

Follow-up question : does Costa Rican inflation appear to have been historically faster, slower, or at about the same pace as U.S. inflation? Perhaps it would take someone who's been down in Costa Rica a while to answer this one.

...or somebody who's intrigued enough by the question to Google.
ANSWER: According to to the CIA World Fact Book as reported in
www.indexmundi.com a terrific source for country data:
CR 2003-8 >>8.9% to 13.8% >>not uncommon for emerging countries
US 2003-8 >>1.6% to 3.2% >>about right for mature economies

_________________
"A man accustomed to hear only the echo of his own sentiments, soon bars all the common avenues of delight, and has no part in the general gratification of mankind"--Dr. Johnson
"Amen, brother"-ED