Panama is a country with a completely dollarized economy, where the balboa (local currency) is equated with the dollar. Banknotes in circulation are entirely U.S. dollars; You can also find 1 balboa coins equivalent to 1 USD and smaller denomination coins (0.01, 0.05, 0.10, 0.25 and 0.50) of both balboa cents and dollars.
General information about the currency circulating in Panama
As a curious fact, we can tell you that the balboa is not considered an independent currency, but rather a local variation of the dollar; So much so that the country lacks its own banknotes, so the paper money in circulation is exclusively American.
The relationship between the Panamanian balboa and the U.S. dollar dates back to 1904, when it was decreed that the balboa (as a monetary unit) would be tied to the nominal value of the dollar.
The 1 balboa coin known in the country as “Martinelli” officially entered circulation in 2011, becoming on par with the $1 US dollar bill. That year, approximately 40 million balboas were issued to supply the market with the new currency.
Panama’s official currency
The legal tender currencies are the Panamanian balboa and the U.S. dollar, both of which have a fixed exchange rate that makes them have an equal value.
Using Dollars in Panama
Is it necessary to exchange dollars for balboas in Panama? – What currencies do they use in Panama? These are a couple of very common questions among tourists and travelers planning to visit the country, the answer is No. The use of the dollar is valid throughout the country, so you won’t have to do any kind of currency exchange to make your purchases, pay for your stay or use Panama’s public transportation system.
Exchanging Currency in Panama
If you plan to travel to the country and still have doubts about the currencies used in Panama or about currency exchange, here we will give you the answers! As we already mentioned, if your currency is the U.S. dollar, you can use it freely in the country; But if you bring foreign currencies such as the Colombian peso or the euro, we recommend you visit our website. Exchange house where, in addition to getting the best exchange rate, we will ask you for few requirements and the currency exchange process will be much faster.
You also have the option of going to a bank for currency exchange, although we must admit that it is not the most flattering alternative, as they require more requirements, the exchange rate is lower and the procedure is more cumbersome.
Summary and recommendations on the use of currency in Panama
In conclusion, the use of U.S. dollars and Panamanian balboas is fully allowed in Panama. People who bring different currencies into the country should get a reliable place to exchange currency for local currency or USD, preferably in an exchange house or exchange , which are the places with the most benefits for foreigners.