The official currency of Panama is the U.S. dollar, referred to locally as balboa. American banknotes and coins are used alongside Panamanian balboa coins, which match the weight, composition, value and dimensions of corresponding American coins, differing only in design. All retail and bank transactions are conducted in American dollars.
The Panamanian balboa has a fixed exchange rate of 1:1 to the American dollar, according to Panama Guide. That rate has been in effect since the country stopped using the Colombian peso in 1904. Balboa paper currency was discontinued in 1941. One balboa is equal to 100 centésimos, and Panamanian coins are produced to match American counterparts of pennies, nickels, dimes, quarters and half dollars. The National Bank of Panama occasionally places one-balboa coins, designed after the U.S. Eisenhower dollar, into circulation, said Panama Guide.