Nicaragua: Currency & Financial System

Nicaragua's currency, the córdoba, is named for Francisco Hernández de Córdoba, the Spanish conquistador credited with founding León and Granada. Nicaragua created the córdoba under the Monetary Conversion Law of March 1912, establishing the National Bank of Nicaragua at the same time and replacing the peso moneda corriente that had circulated since 1878, though political instability delayed the new currency's actual circulation until 1913. High inflation forced repeated overhauls in the late twentieth century: the Sandinista government replaced it with a "new córdoba" at 1,000 to 1 in February 1988, then with the córdoba oro, pegged to the US dollar, in 1990. The córdoba name returned in 1992 and remains in use today.

The Central Bank of Nicaragua (BCN) introduced a crawling peg against the US dollar in 1991, starting with an annual devaluation rate of 12 percent that was gradually reduced over the following decades, falling to 5 percent and later to 3 percent per year by the mid-2010s. As of 2026, the BCN has moved to an announced crawl rate of zero percent, effectively fixing the córdoba at around 36.6 córdobas per US dollar, a stance the International Monetary Fund's 2025 Article IV mission said the bank should stand ready to adjust if downside risks to the economy materialize. The BCN has also worked to encourage greater use of the córdoba over the US dollar in everyday transactions.

Nicaragua's financial sector was assessed as well capitalized with adequate liquidity and low non-performing loans in the IMF's 2025 Article IV consultation. As of 2025, the non-performing loan ratio stood at about 1.2 percent, down from 1.4 percent the prior year, while the regulatory capital-to-risk-weighted-assets ratio rose to 19.1 percent. Private credit growth, which reached 20.7 percent in 2024, is projected to moderate to roughly 12.4 percent in 2026 as the economy settles into a steadier expansion. The IMF recommended that Nicaraguan authorities prepare to activate counter-cyclical capital buffers and stand ready to release them if financial conditions deteriorate.