What Is the Nicaraguan Cordoba (NIO)?
The Nicaraguan córdoba (NIO) is the national currency of Nicaragua, the largest country in Central America. It is sometimes referred to as the córdoba oro. The córdoba is named after Spanish colonizer Francisco Hernández de Córdoba, founder of the cities of León and Granada.
The NIO is made up of 100 subunits called centavos, and is represented by the symbol C$ in writing. Its paper notes are colorful and have denominations of 10, 20, 50, 100, 200, 500 and 1,000 córdobas. Coins circulate in values of 5, 10, 25, and 50 centavos, as well as in one, five and ten córdobas.
- Nicaraguan córdoba (NIO) is the currency of Nicaragua.
- The córdoba was first issued in 1912 and has suffered from chronic and severe inflation.
- Nicaragua is one of the poorest countries in the Western Hemisphere, with exports heavily reliant on agriculture and raw resource extraction.
Understanding the NIO
The history of currencies in Nicaragua is relatively unique in that the country formerly used several different currencies simultaneously within its borders. The most common among these were the currencies of Peru, Bolivia, Colombia and the United States.
In 1859, the León market in Nicaragua was permitted to issue a currency with a value one-tenth that of the U.S. dollar. However, this new currency only circulated regionally, meaning it did not fill the role of a full-fledged national currency.
In 1878, the first national coins entered circulation. Beginning in 1888, private banks were also permitted to print and issue private currencies. This led to a complex currency system in which private currencies coexisted alongside the national currencies of multiple nations. This ended in 1912 with the creation of the Central Bank of Nicaragua. Soon after, the córdoba was established as the official national currency.
The córdoba struggled with persistent inflation in the years following its introduction. The currency underwent redenomination in 1988, with the new córdoba issued at a rate of 1 per 1,000 old córdobas. In 1990, the córdoba oro was introduced as a unit of account. In 1991, the gold córdoba—which originally had been backed on a 1-to-1 basis with U.S. dollar reserves—was devalued to 20 U.S. cents per gold córdoba, equal to five million old córdobas. On April 30, 1991, the córdoba replaced the gold córdoba and old córdoba as legal tender.
Real World Example of the NIO
In 1992, the Central Bank of Nicaragua announced an exchange rate policy whereby the NIO would be depreciated against the U.S. dollar by 5% per year. Between December 2011 and December 2020, the NIO's value weakened from about 21.8 NIO per USD to 34.8 NIO per USD.
Nicaragua is one of the poorest countries in the Western Hemisphere. Its economy depends on agriculture and much of its income is derived from coffee bean and tobacco exports. However, crop yields grow smaller each year due to erosion, pollution, and heavy pesticide use. Mining is a growing industry, and the harvesting of lumber continues, despite environmental concerns.