What is the PAB (Panamanian Balboa)
PAB (Panamanian Balboa) is the national currency for the Republic of Panama which circulates alongside the U.S. dollar (USD). The currency's name honors Vasco Nunez de Balboa, the Spanish explorer, conquistador, and founder of the first Spanish settlement in Panama in 1510. Balboas are issued only in coin form and subdivides into 100 centimos.
BREAKING DOWN PAB (Panamanian Balboa)
PAB, the Panamanian Balboa, was introduced in 1904, replacing the Colombian Peso, following Panama’s independence from Colombia. With freedom came the introduction of silver coins in denominations of 2-½, 5, 10, 25, and 50 centimos. Later coins included coins in 1/10, ¼, ½, 1-¼, and one centesimo and changes in the metal composition and size to resemble coins issued by the U.S.
Since its inception, the Panamanian Balboa pegs to the US dollar (USD) at par. Significant American presence, starting with the construction of the Panama Canal in 1904, influences the country's currency.
Located on the thin slip of land connecting North and South America, Panama derives a significant portion of its income from toll for the use of the Panama Canal. The country declared their independence from Spain in 1821 and a month later unified with neighbor Columbia forming the Republic of Columbia. In 1903, the region declared its independence from Columbia and became a constitutional democracy. The United States received criticism for encouraging the separation, due to their interest in reviving the failed French attempt at creating a man-made waterway between the Atlantic and Pacific oceans.
The Panamanian government was a business monopolized oligarchy until the military challenged it in the 1950s and 60s. Elections in 1968, marred by violence and fraud, led the Panamanian National Guard to oust the elected president and appointed a provisional government. The country passed a new constitution in 1972 but continued to be crippled by a succession of corrupt governments and fraudulent elections. Beginning in 1987, the U.S. would intervene into Panama again, imposing sanctions and eventually invading the country in 1989 to replace the government. Stability returned to the country in the 1990s, and this situation continues through the 2000s.
In recent years, the Republic of Panama has seen a growth in its economy, but there continues to be an unequal distribution of wealth. The updating and expansion of the Panama Canal opened in 2016, and the Canal continues to provide a significant portion of the country's income. According to the 2017 World Bank data, Panama experiences a 5.4% yearly growth in its gross domestic product (GDP) with a 1.5% annual inflation deflator.
Seven Days Balboa Banknotes
In 1941, President Arnulfo Arias enacted Article 156 of the Panamanian Constitution. This Article authorized both private and public banks to issue private currency Balboa banknotes and resulted in the creation of El Banco Central de Emisión de la República de Panamá, or Central Bank of Issue of the Republic of Panama.
Seven days later a coup replaced Arias with Ricardo Adolfo de la Guardia Arango. The new government immediately shut down the banknote issue, closed the bank, and ordered all 2,700,000 notes issued to that date incinerated. Very few banknotes survived and to this day the so-called “Seven Days’ Notes” are valuable collector’s items.
Panama commemorative coins of the denominations 5, 10, 20, 50, 75, 100, 150, 200 and 500 balboas were minted from time to time to celebrate significant milestones in Panama’s history.