5 Centimos – Costa Rica

In 1951, Costa Rica's currency situation was characterized by a managed system under the authority of the International Monetary Fund (IMF), which the country had joined just two years prior. The official currency was the Costa Rican colón, which was pegged to the U.S. dollar at a fixed rate of 5.60 colones per dollar. This peg was a cornerstone of the government's economic policy, intended to provide stability and curb the high inflation that had plagued the post-World War II period. The arrangement required disciplined fiscal and monetary policy to maintain, as the Central Bank of Costa Rica, established in 1950, was tasked with managing reserves to defend the fixed exchange rate.

However, this formal stability existed alongside significant economic pressures. The country was heavily dependent on agricultural exports, primarily coffee and bananas, making the colón vulnerable to fluctuations in global commodity prices. Furthermore, the ambitious social reforms and state-led development projects of the 1940s, following the 1948 Civil War, had created persistent fiscal deficits. These deficits were often financed by the Central Bank, creating underlying inflationary pressures that strained the fixed exchange rate system and led to periodic discussions about devaluation.

Consequently, 1951 represented a period of precarious balance. While the official colón-dollar parity held firm, the fundamental economic imbalances foreshadowed future instability. The tension between the fixed exchange rate, expansionary fiscal policies, and a vulnerable export economy would culminate in a major devaluation just three years later, in 1954, when the peg was adjusted to 8.57 colones per dollar. Thus, the currency situation in 1951 was one of apparent but fragile stability, marking a critical juncture before a significant monetary adjustment.