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Nicaragua Currency
From 1912 to 1988, the córdoba was the basic unit of
currency. Relatively stable during most of that period,
the value
of the córdoba was pegged to the United States dollar. One
of the
last economic decisions by the Somoza administration was a
devaluation in April 1979 of the córdoba from US$1 = 7C$
to US$1
= 10C$, a value it held until 1985.
In 1985 mounting economic problems, especially the
imposition
of the trade embargo by the United States, forced the
Ortega
administration to opt for a multitiered exchange rate,
with one
rate for petroleum imports, one for agricultural goods,
one for
capital goods, and another used at government exchange
houses.
Amid this confusion, a black market sprang up offering
significantly more córdobas per dollar than any of the
official
government rates. As inflation increased from 1985 through
1988,
the value of the córdoba plummeted, and by mid-1988 the
government exchange houses offered US$1 = C$20,000, while
a
United States dollar on the black market fetched 60,000
córdobas.
To curb hyperinflation, the government introduced its
economic shock program in February 1988. Currency
stabilization
was an integral part of this package, and a new currency,
the
new córdoba
(C$n--for value, see Glossary),
was introduced.
Each new
córdoba equaled 1,000 old córdobas, and the new currency's
exchange rate was set at US$1 = 10 new córdobas. By the
end of
1988, however, the rate at government exchange houses had
dropped
to US$1 = 920 new córdobas.
Devaluation accelerated in 1989 and 1990. Immediately
after
the 1990 elections, the currency lost four-fifths of its
value.
By the end of 1990, it took 3.2 million new córdobas to
buy a
United States dollar on the black market. The government
was
unable to print money in large enough denominations to
make
simple transactions convenient.
To help control inflation, the Chamorro government
introduced
a third currency, the gold córdoba, in mid-1990. At first
used
only as an accounting device, this new currency was
introduced
gradually to the general populace, and for six months both
currencies were legal tender, with a conversion rate of 5
million
new córdobas to one gold córdoba. After April 31, 1991,
the gold
córdoba became the sole legal currency and was pegged to
the
United States dollar at a rate of US$1 = 5 gold córdobas,
a rate
it maintained throughout 1992. By July 1993, the exchange
rate
had slipped only slightly, to US$1 = 6.15 gold córdobas.
Data as of December 1993
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