Panama's Currency: The Balboa (Since 1904)

There is no "Panamanian Balboa"—the currency is simply the Balboa (PAB), named for Vasco Núñez de Balboa, Pacific Ocean discoverer.

Key Facts

• Introduced: 1904 (replacing Colombian peso after independence)
• Peg: 1:1 with US Dollar since inception
• Coins: Panamanian-issued (1, 5, 10, 25, 50 centésimos; 1 balboa)—identical specs to US coins
• Banknotes: None issued since 1941 (brief 1941 issue recalled). US dollars circulate as paper currency.
• Dual currency system: Panamanian coins + US dollar notes = legal tender.

Historical Context

1904 monetary convention established the balboa/dollar parity under US influence (Hay-Bunau-Varilla Treaty, Canal Zone). Panama has no central bank—Banking Superintendency regulates; money supply determined by dollar flows.

Practical Implications

• No independent monetary policy (dollarized economy)
• Zero exchange rate risk for US transactions
• Inflation imported from US
• Seigniorage revenue lost (no note issuance)
• Coins profitable (face value > metal cost)

Panama is one of few fully dollarized economies with its own coinage—Ecuador, El Salvador, Zimbabwe use only US currency.