No, it’s not a birthday but the Nicaraguan Córdoba Oro (NIO) to US Dollar official exchange rate passes the 36 Córdobas to the US Dollar mark (36.0002 to be exact) on Sunday the 4th of September 2022.
Central Bank of Nicaragua (Banco Central de Nicaragua-BCN) Official Exchange Rate (Tipo de Cambio or Tasa de Cambio)
The official exchange rate is determined by the BCN and published monthly.
In the case of Nicaragua, it’s calculated using the crawling peg method which is currently a 2% per annum devaluation of the Córdoba against the US Dollar (See below).
Note: The other two rates, the buy or sell rates used by the retail market (banks, financial institutions and “Cambistas” (money changers) are quoted daily or on the spot by the money dealers. The buy/sell rates are based on the vendors making money on a rate they think the market is prepared to buy and sell each currency.
History of the Córdoba
The Nicaraguan currency is named after the Francisco Hernández de Córdoba (1475–1526), the Spanish “Conquistador” (conqueror) credited as the founder of Nicaragua.
March 20th, 1912 the first currency named a Córdoba was introduced to replace the Peso. It was originally based on fixed rate of 1 Córdoba to 12 ½ old Peso’s and was equal to the US Dollar.
February 15th, 1988 the second Córdoba was introduced. The exchange rate at that time was 10.1414 Córdobas to the US Dollar.
April 30th, 1991 the current Nicaraguan Córdoba Oro (NIO) was introduced. At that time, the exchange rate was 5.00 Córdobas to the US Dollar.
Note: The proper way to write the symbol for the Córdoba is C$. For example; C$10, C$20, C$50 etc.
The Crawling Peg and how the US $ Exchange Rate is Calculated
Nicaragua began using a crawling peg in 1993 as part of the continued stabilization program that had reduced hyperinflation as a result of the revolutionary and civil war years.
In 1993, Nicaragua started using the crawling peg system at 12%. This meant that the Nicaraguan Córdoba Oro was being devalued against the US Dollar by 12% a year.
By 2004, the crawling peg had been reduced to 5%, where it stayed until 2019.
On October 28th 2019 the Central Bank of Nicaragua changed the crawling peg to 3% annually, effective November 1st
Effective December 1st 2020, the Central Bank of Nicaragua announced a crawling peg rate of 2.0% per year.
Only two countries; Nicaragua and Vietnam use a crawling peg system today.
