Along with the United States dollar, the Panamanian balboa is one of the official currencies of Panama. It was named for the Spanish explorer and conquistador Vasco Núñez de Balboa, and the balboa is subdivided into 100 centésimos.
Background of the Panamanian Balboa After achieving independence, the balboa replaced the Colombian peso. Since its introduction, it has been tied to the United States dollar at an exchange rate of 1:1 and has circulated alongside the US dollar since. The National Bank of Panama is one of two government-owned banks and was responsible for nonmonetary aspects of central banking in Panama.
In 1904, silver coins in denominations of 2+1⁄2, 5, 10, 25, and 50 centésimos were introduced. These coins were related to the 25-gram 50 centésimos, making the 2+1⁄2 centésimos coin 1.25 grams. Its small size resulted in nicknames like the “Panama pill” and the “Panama pearl.” In 1907, more Panamanian coins were issued, with the introduction of copper-nickel 1⁄2 and 2+1⁄2 centésimo coins, which preceded copper-nickel 5 centésimo coins in 1929. In 1930, coins for 1⁄10, 1⁄4, and 1⁄2 balboa were introduced, followed by 1 balboa in 1931, which were identical in size and composition to the equivalent U.S. coins. Features of the Panamanian Balboa Pegged to the U.S. Dollar
The balboa has been pegged to the U.S. dollar at a 1:1 exchange rate since its inception. This means that 1 balboa is always equal to 1 U.S. dollar. This peg has been in place since 1904, providing stability and ease of use for residents and visitors. Coins and Banknotes
The balboa is primarily issued in coins. Balboa coins are available in denominations from 1 to 5 centésimos (equivalent to cents), and 1/10, 1/4, 1/2, and 1 balboa. While Panama does not issue its own banknotes, U.S. Federal Reserve Notes are used for paper currency and larger transactions. This dual-currency system allows for seamless financial operations within the country. Source
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