Comprehensive Financial History Report of Costa Rica

Basic Information

• Country ISO Code: CR

• Official Language: Spanish

• Language ISO Code: es

• Current Official Currency: Costa Rican Colón

• Currency ISO Code: CRC

Monetary History of Costa Rica

Colonial Period and Early Monetization

• During the colonial period (16th to early 19th century), Costa Rica used Spanish gold and silver coins minted by Spanish mints.

• Currency circulation was limited due to low population and a barter-based economy.

• After the 1778 decree of free trade for Spanish colonies, monetization increased with more foreign silver coins circulating.

19th and Early 20th Century Developments

• In 1839, the peso was introduced as the first national currency, with issuance of vouchers for public employees.

• The National Bank of Costa Rica was founded in 1858, issuing notes of 1, 2, 10, and 20 pesos.

• Decimalization of currency denominations began around 1860.

• Foreign coins circulated alongside local currency, sometimes with adjusted values, leading to coin re-stamping to ensure value.

Monetary Reform and Introduction of the Colón

• In 1896, a monetary reform established the colón as the official currency, replacing the peso.

• The colón is subdivided into 100 centimos.

• Legislation in 1900 allowed banks with minimum capital to issue paper money denominated in colones.

Consolidation of the Monetary System

• In 1914, the International Bank was created and granted exclusive rights to issue banknotes in 1921.

• In 1936, the International Bank was restructured and renamed the National Bank of Costa Rica, with an issuing department for monetary control.

• In 1950, the Central Bank of Costa Rica was established and took over exclusive currency issuance in 1951, issuing notes with the legend "Banco Central de Costa Rica."

Monetary Policy and Stability

• In 1922, the Conversion Fund was created to stabilize the colón, maintaining a fixed exchange rate near 4 colones per US dollar until 1931.

• The Great Depression posed challenges, with exchange controls and difficulties maintaining parity.

• From the 1930s onward, reforms aimed at stabilizing the currency and controlling inflation, with the Central Bank playing a key role.

Current Coins and Banknotes

• Coins in circulation: 5, 10, 25, 50, 100, and 500 colones.

• Banknotes in circulation: 1,000; 2,000; 5,000; 10,000; 20,000; and 50,000 colones.

• Designs feature national symbols, historical figures, natural landscapes, and cultural elements.

• The Central Bank of Costa Rica is responsible for currency issuance and regulation.

Summary

This report provides a detailed overview of Costa Rica’s monetary history, highlighting the evolution from colonial currency to the colón, and the Central Bank’s role in maintaining economic stability.