The official currency of Panama is the Panamanian Balboa, which is pegged to the United States dollar. Importantly, Balboas are only available in coinage. So, the vast majority of transactions taking place, both in person and online, are completed in USD.
In this article, we’re going to answer the most common questions we receive about the currency of Panama and share important currency-related considerations if you are planning on opening here.
This article is part of our free series on applying for and opening an account in Panama, which you can access by clicking here right now.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Currency of Panama
- Where Can You Exchange Money in Panama?
- Can You Use Foreign Credit Cards in Panama?
- Frequently Asked Questions
- Ready to Open an Offshore Bank Account?
Currency of Panama
The currency of Panama is the Panamanian Balboa (PAB or B/.). The Balboa is pegged at par value to the United States Dollar (USD or $), which is the second official currency of the country. Importantly, Balboa is only available in coinage and all paper transactions are completed in USD.
In the following sections of the article, we will discuss currency exchange, local payments, and answer common questions we receive from our members. These factors will be especially important to anyone considering opening a retail bank account, personal bank account in Panama, or investing in local real estate.
Likewise, businesses considering local operations, commercial banking solutions, or opening a business bank account in Panama will want to understand how their home currency compares to PAB and USD.
But, before diving in, it’s important to note that even though Panama is a dollarized economy, banks here do offer foreign currency and multi-currency accounts. So, if you are looking for an international account with access to USD and other currencies, banking services in Panama could be worth considering. This is especially true if you are looking to make an international money transfer out of Panama or send money to Panama frequently.
If you’re looking to open an offshore bank account in Panama to access offshore banking solutions there are a few things you need to consider. Prospective customers should consider the bank’s service rates and other banking costs of opening a Panama bank account before contacting Panama banks directly. Not to mention, the account rewards and benefits of banking in Panama and how your specific client profile can unlock them.
To get more insights on banking in Panama, access any of our free resources covering the account holder prerequisites and banking requirements in Panama. Of course, if you want to unlock instant access to premier financial services through the best banks in Panama, you can use GlobalBanks IQ to get started immediately.
Where Can You Exchange Money In Panama?
Where you can exchange money in Panama depends on the amount you want to exchange, the fees you’re willing to pay, and where in the country you are located. That said, most people elect to exchange money at currency exchanges, branches of major banks, including the largest banks in Panama, the airport, or hotels.
Of course, exchange rates and fees will vary drastically between each of these options. So, it’s very important that you compare the exchange rates and fees that each of these options will charge you before choosing which method to use.
Can You Use Foreign Credit Cards in Panama?
Yes, you can use foreign credit cards in Panama. In fact, all major credit cards are widely accepted in Panama. Of course, there are some instances where certain credit cards, like American Express, may not be accepted. But, for the most part, vendors do accept Visa, MasterCard, and Amex.
That said, it’s important to keep in mind that if you are using a foreign credit card to complete a purchase in Panama, you will likely be charged foreign exchange fees. Of course, if you have a foreign credit card that has zero foreign exchange fees, this won’t apply to you.
Can You Use Foreign Currency in Panama?
No, you cannot use foreign currency in Panama. Instead, have the choice of using either Panamanian Balboas or United States Dollars. If you have foreign currency, you will have to exchange your money for US dollars before or when you arrive in Panama.
That said, popular tourist destinations like certain hotels and casinos may accept major currencies. However, you will likely pay significantly higher exchange rates for the privilege of using foreign currency at these locations.
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Frequently Asked Questions
Below are a few of the most common questions we receive from people asking about the currency of Panama. If you have further questions you would like answered, don’t hesitate to get in touch.
Can Non-Residents Open Bank Accounts in Panama?
Yes, non-residents can open bank accounts in Panama as long as they meet account opening requirements and have a suitable client profile. That said, generally speaking, non-residents can open personal accounts and business accounts, and even unlock high-net-worth banking services, through private bank accounts in Panama. Of course, requirements will differ between banks registered in Panama, including the list of local and foreign banks, and account types.
What Is the Main Currency in Panama?
The main currency in Panama is the Panamanian Balboa. However, the United States Dollar is also an official currency, to which the Panamanian Balboa is pegged at par value. It’s important to note that the Balboa is only available in coinage and is circulated interchangeably with the US coins. All paper transactions are completed in US money.
Does Panama Take US Dollars?
Yes, Panama does take US dollars. In fact, the US dollar is the legal currency in Panama, making it an attractive destination for travelers coming from the United States or other economies where USD is the official currency. Of course, Panama is also an attractive destination for anyone from a country where the home country has appreciated against the USD, making Panama an economical choice for investing in real estate or vacationing. That said, like opening accounts elsewhere, it’s important to consider each bank’s credit risks, lending exposure risks, and other Panama banking risks before applying.
Why Does Panama Use the U.S. Dollar?
The reason why Panama uses the U.S. dollar as their official currency can be explained politically, economically, historically, and even socially. In short, Panama does not have a central bank, their largest trading partner is the United States, and following separation from Colombia, the United States was quick to recognize the country’s independence. When the Panamanian Balboa was officially announced as the country’s currency in 1904, it was pegged at par value to USD.
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