Panama City Money and Prices
Panama City, Panama
Panama is not the country for a low-cost getaway. The place isn´t expensive by any means, but it´s not a steal like Nicaragua or Malaysia. Some points:
-- The George Washingtons are weirding me out. Panama has a dollarized economy. The official unit of currency is the balboa, but it´s fixed to the dollar at a 1:1 ratio. Balboa coins are minted at the same size and shape as U.S. coins, but all the paper money is U.S. greenbacks. Prices are in dollars (but with a B/ symbol instead of a $), and people speak in dollars.
While the use of American money makes it easy for travellers to compare costs, the sight of dead presidents makes Panama feel less like a foreign country and more like a U.S. colony (which is essentially what Panama was for 100 years).
How does Panama have a monetary policy? Its flow of dollars must be like the flow of water in a small tributary of the Amazon; any disruption on the main river would overwhelm the crick.
And, for better or worse, Panama is lashing itself to the foreign exchange value of the dollar. The country´s purchasing power for many imports is tied to decisions made in Washington, and I will guess that the interests of Panamanians is not a high agenda item at meetings of the U.S. Federal Reserve´s Federal Open Market Committee. (Loyal reader StatBoy3000, who once held U.S. monetary policy in his deadly fingers, will correct me if I am wrong.)
Countries should have their own currency. It´s strange that Panama has adopted another country´s money.
-- General Cost Levels. As a rule of thumb, the high end of consumer purchases in Panama City costs about 75% of what you would expect in a major city in the United States. More value-oriented options cost about 50% of the U.S. price, and the least expensive choices -- particularly those marketed to Panama City´s working class -- cost about 25%.
From what little I´ve experienced and read of the provinces, prices can be half of the Panama City price. The principal exceptions are provincial resorts marketed to affluent tourists. Those charge the top Panama City price.
-- Lacuna. Panama City is a hotbed of international banking, yet there are few obvious places to change money if you arrive without U.S. dollars.
Pictured: A Panama City branch of Global Bank.