Four decades moving from a fixed peg to a managed float

Costa Rica's exchange-rate charts reflect a slow, deliberate retreat from administered rates rather than any single crisis. The Banco Central de Costa Rica (BCCR) ran a fixed rate from the bank's founding era through 1980, before a disorderly, de facto float during the 1980-83 debt crisis gave way to a crawling peg from 1984 to 2006, then a crawling exchange-rate band from 2006 to 2015 that progressively widened to give the colón more room to move. On January 30, 2015, the BCCR's board formally eliminated the band and adopted a managed float, letting supply and demand set the rate day to day while reserving the right to intervene against disorderly moves. In practice the BCCR kept intervening fairly often in the years that followed, a pattern researchers have described as fear of floating, since large swings in the colón feed quickly into prices and into the balance sheets of households and firms holding dollar debt. The net effect shows up in the data as a currency that looks far calmer than a true float, even decades after Costa Rica nominally abandoned managed exchange rates.