Honduras is the second largest Spanish-speaking country in Central America. In the recent years, the country’s economy has grown at an average annual rate of 7%, which is the highest growth rate in Latin America. The Central Bank of Honduras has played a crucial role in stabilizing economic growth in the country through regular controls of the banking sector. The country's proximity to the Caribbean Sea and Pacific Ocean makes it an attractive business hub. This resulted in the government pronouncing San Pedro as a tax-free zone, allowing international companies to invest immensely in the country. Due to the influence of these international companies, there is a wide supply of US dollars in Honduras. However, the official currency is the Honduran lempira, coded as HNL and symbolized as L.
History of the Honduran Lempira
The Honduran lempira was first issued in 1931 in place of the Honduran peso, the formal currency at the time. The currency is named after the 16th century chief, cacique Lempira, of the indigenous Indian Lenca community, who led the resistance movement against Spanish rule. The currency began trading in the Honduran Exchange Market in the late 1980s against the US dollar, which was the base currency, at 20 cents. The currency has continued to gain value and is currently trading at HNL23.44 against the US dollar.
The first lempira coins were issued for circulation in 1931 in denominations of 5, 20, and 50 centavos. In 1932, the 10 centavos coin was introduced, and later in 1939, the 1 centavo coin was distributed for circulation. Lempira coins were initially minted in silver, but were replaced with cupro-nickel in 1967. With the devaluation of the coins over the years against the US dollar, the 1 and 2 centavo coins were phased out in 1974 and 1998, respectively, leaving 5, 10, 20, and 50 coins in circulation.
Banknotes were first printed and distributed in Honduras in 1932 by the Bank of Honduras and the Banco Atlántida in denominations of 1, 2, 5, 10 and 20 lempira. However, in 1950, the Bank of Honduras annexed the production and printing of paper money and introduced the 50 lempira note in 1951, and the 100 lempira note in 1975. In 1995, the bank minted the 500 lempira note. More recently, a new 20 lempira note began to circulate in 2010 and is printed from a polymer base.
The different denominations of lempira banknotes feature images of prominent leaders in the country. Cacique Lempira is the most common figure, and is featured on the 1 lempira note. Marco Aurelio Soto, former Honduran President, is featured on the 2 lempira coin, while the conqueror of the La Trinidad Battle, Francisco Morazán, is featured on the 5 lempira coin. Other former presidents, such as Jose Cabañas and Manual Galvez, have their portraits on the 10 and 50 lempira coins, respectively. The country’s opposition leader, Dionisio de Herrera, has his portrait featured on the 20 lempira bill, while Jose Cecilio, a renowned philosopher is featured on the 100 lempira note, and biographer Rosa Ramon’s portrait is printed on the 500 lempira note.
Another notable feature of lempira banknotes is that they come in different colors making them easy to differentiate: L1 (red); L2 (purple); L5 (dark gray); L10 (brown); L20 (green); L50 (blue); L100 (yellow); and L500 (magenta).