DGC Blog

Banco Nacional de Panama, A Classic

Photograph of one of the oldest branches of Banco Nacional de Panama located at La Peatonal Street in Panama City, Panama. (Credit: Omar Upegui R./Michael Moore)

The Banco Nacional de Panama (BNP) is a state-owned commercial bank which acts very similarly to the Federal Reserve Bank in the United States.  The only exception is that the BNP does not print paper money; it only issues Panama coins.

It is to be noted that Panama does not have paper money.  The Balboa is only a symbolic name, the real currency used in Panama is the U.S. dollar since 1904.  U.S. and Panama coins circulate freely in this dollar economy Central American country.

Panama’s monetary system is unique. United States dollar notes serve as the paper currency and are legal tender in Panama. The local currency is the Balboa, which, since its creation in 1904, has remained tied to and equal to the United States dollar. Panama issues only coins corresponding in size and metallic content to United States coins.

Panama’s monetary system has benefited the country in numerous ways. The country has enjoyed almost automatic monetary and price stability. International transactions have been facilitated by the use of the United States dollar. No short-term transfer problems are associated with the balance of payments. The foreign exchange constraint felt by most developing countries has been obviated by the dollars circulating in the economy and the ability to borrow.

And now you know, that you can use your Kansas or Wisconsin money with no problems in Panama.  Good Day.

Source: http://epiac1216.wordpress.com/2009/03/20/photograph-of-the-day-an-old-bank-of-panama/