Honduras: Currency & Financial System

Honduras's national currency is the lempira, introduced in 1931 to replace the earlier peso at par. It takes its name from Lempira, a sixteenth-century Lenca cacique remembered for resisting Spanish conquest. The Central Bank of Honduras (Banco Central de Honduras, or BCH) has held sole authority over currency issuance since assuming banknote production in 1950, succeeding the private banks that printed the first lempira notes in 1932. The currency circulates in banknotes ranging from one to five hundred lempiras and in centavo coins, though coins see limited everyday use.

Honduras manages its exchange rate through a crawling band, under which the BCH sets a daily reference price and channels foreign currency sales through an electronic auction rather than an open interbank market, which has been suspended since 2023. As of 2026, the lempira has continued a gradual, managed depreciation against the US dollar, driven by a widening merchandise trade deficit and elevated fuel import costs, though remittance inflows and ample reserves have helped cushion the pressure. The BCH held its benchmark policy rate at 5.75 percent through much of 2025 and into 2026 while inflation ran above its medium-term target range, and the bank has signaled it stands ready to adjust policy if price pressures persist. Authorities have outlined plans to gradually restore interbank trading and move toward greater exchange rate flexibility over time.

The banking sector, supervised by the National Banking and Insurance Commission (CNBS) working alongside the BCH, consists mainly of privately owned commercial banks. As of 2026, international reviewers assessed the sector as well capitalized, with capital levels comfortably above regulatory minimums and non-performing loans near 2.6 percent of total assets. Credit growth slowed through 2025 before a modest pickup in early 2026, and regulators have added capital buffers and continued efforts to strengthen banking governance and oversight.