Panama’s currency is known as the Balboa, which has a 1:1 exchange rate with the U.S. dollar. Despite having its own name, the currency is the exact same bill as the U.S. dollar, though separate Panamanian coins of the same value, size and metal as U.S. coins continue to circulate and include values of 100 and 500 Balboas. Both Panamanian coins and U.S. coins and dollars can be used in the country, though Panamanian coins generally cannot be used abroad.

Panama adopted the U.S. dollar upon its independence from Colombia in 1904. The nation was created mainly due to a high level of U.S. support and interference with the end goal of facilitating the construction and control of the Panama Canal through the territory. In 1941 the government of Panama tried printing their own bills, but they were quickly recalled and have hence since been named “the seven day dollar”.

Not only does Panama’s currency facilitate financial transactions with the U.S. and offer a convenient exchange rate for American travelers, visitors to the country can also exchange currencies from almost anywhere in the world. Casas de cambio or large national banks in Panama City are modern and offer nearly all world currencies thanks to the city’s extensive international offshore banking industry.

This should help erase most financial concerns from your plate when planning your vacation to Panama. To further prepare you, here is a list of average costs for travel, food and accommodations in this extremely convenient and affordable destination:

You can tip some small change, or around 10% of the bill if you’re feeling affluent, in fancier restaurants; in small cafes and more casual places, tipping is not necessary. Haggling over prices is not the general custom in Panama.

* Budget: US $3-7
* Mid-range: US $9-15
* Top-end: US $20+

* Budget: US $19-29
* Mid-range: US $39-59
* Top-end: US $90+

Accommodations tend to be more expensive in Panama than in other parts of Central America (excluding Costa Rica), but still come at a bargain in comparison to most international travel destinations. A hotel room that might cost US$6 in Nicaragua or Guatemala might cost US$10 here. If you’re traveling on a budget, you’ll pay at least US$25 per day for a room and three meals. A moderate budget will be in the range of US$30-50 a day, while a luxurious vacation may cost upwards of $100 per day per person.

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