As announced this last August by the Central Bank of Nicaragua (BCN), the sliding rate of the Nicaraguan Córdoba (NIO) against the US Dollar (USD) will be 0% starting January 1st 2024. This eliminates the slow devaluation of the Córdoba and fixes the US $ to Córdoba exchange rate at what it will be for the year end; which is 36.6243 Córdobas for every US Dollar.
Since November 2019, the BCN has been making steady reductions in the slip rate or “crawling peg” system which devalues the Nicaraguan Córdoba. In that month it went from the long standing 5% per annum down to 3%. This was followed by a drop to 2% in December 2020 and a further reduction to 1% in February of this year, 2023.
The slip rate or crawling peg concept was designed to protect countries such as Nicaragua against economic instability caused by sudden fluctuations in the Córdoba to US Dollar exchange rate.
Quick Facts;
The exchange rate slippage of zero percent (0%) will come into effect as of January 1, 2024.
The Central Bank of Nicaragua will no longer publish the daily official exchange rate as it will be redundant. The rate for all of 2024 will be 36.6243 Córdobas per United States dollar.
The announcement in August 2023 was designed to give plenty of lead time for the change as well as assist with the preparation of the General Budget of Nicaragua which must be presented annually by October 15th.
This article refers to the US $ to Córdoba “Official Exchange Rate” not the daily buy/sell rates offered by banks, financial institutions and local money changers known as “Cambistas”. The Buy/Sell rates will continue to be dictated by supply and demand under the free market system.
Under the Fixed Rate
There will be no exchange rate gains for those receiving money in dollars (such as remittances). The fixed exchange rate will apply at the time the sender deposits the money to be forwarded.
The “Maintenance of Value Clause” in any loans you may have will still apply and the values expressed in Córdobas will maintain their value in relation to the US Dollar, the new rate of 36.6243 above.
Currently, the electricity tariffs (in Córdobas) include an adjustment (increase) for the dollar exchange rate. As of January 1st 2024 this should be eliminated.
Salaries in US Dollars and Córdobas will remain constant with no adjustments (needed).
