Washington, D.C (Washington Insider Magazine) — In the early trading session today, the exchange rate of the US dollar to the Panamanian balboa (PAB) averaged at 1:1, marking a notable increase of 2.31% compared to the previous day’s rate of 0.98 balboa.
Over the past seven days, the US dollar has shown a consistent uptrend, rising by 2.42%. Compared to the last year, this currency has accumulated a significant increase of 2.32%. Notably, there have been two days in a row where profits have been increased, indicating a heightened level of volatility compared to the overall trend observed in the last year.
The Economic Commission for Latin America and the Caribbean (ECLAC) has identified Panama as one of the leading economies in the region, forecasting a robust growth rate of 4.2% for the country. However, several factors such as the ongoing electoral period, drought affecting major reservoirs, unemployment rates, and the Federal Reserve’s decision to raise interest rates are expected to influence Panama’s economic landscape.
Panama’s economy is one of the leading in the region, according to the Economic Commission for Latin America and the Caribbean (ECLAC), which projects a robust 4.2% growth rate for the nation. However, several elements affected Panama’s economic environment, including the present election season, the drought, unemployment rates, and the Federal Reserve’s decision to hike interest rates.
Copper Mining and Economic Impact
The suspension of copper mining exports, which typically account for 3-d 4 percent of the national economy, is expected to stifle growth prospects. As a result, growth projections for the current year have ranged between 1.5% and 2%. This adjustment would lead to an increase in unemployment rates and informal employment.
Understanding the Panamanian Balboa
According to Infobae, the legal tender in Panama is dubbed as the balboa, denoted as PAB. It is subdivided into 100 cents. Unique to the balboa is its status as a local version of the US dollar, rather than an independent currency. This arrangement dates back to 1904 following the National Convention of Panama.
According to Infobae, the Panamanian government creates its own coins equivalent to the US dollar that are not widely accepted. Notably, the introduction of the one balboa coin in 2010 faced criticism, leading to it being colloquially referred to as the “Martinelli,” after then-President Ricardo Martinelli.
Efforts to introduce two- and five-balboa coins were abandoned, leaving circulation mainly with denominations such as one-hundredth, one-tenth, one-quarter, and one-half balboa, along with the one balboa coin.
As Panama faces a variety of economic challenges, including volatility in the dollar exchange rate and the impact of external variables, the resilience of its economy remains a priority. The interplay between domestic policies and global economic trends will continue to shape the country’s economic trajectory in the foreseeable future.