The Republic of Nicaragua is situated in Central America between Honduras and Costa Rica. The country was home to Paleo-Americans from as early as 12000 BC. The first Spanish explorers arrived in Nicaragua in 1522 and settled in the western valleys where they found rich gold deposits. Spaniards seized control of the Central American region in the early 16th century, and introduced the first formal currency in the area, the Spanish real. The current official currency in Nicaragua is the Nicaraguan córdoba. The currency uses the sign C$, the code NIO, and is subdivided into 100 centavos.
Spanish Colonial Real
The Spanish colonial real was introduced in Central America in 1572. The currency existed in the form of silver, copper, and gold coins. The eight-real coin was the most famous piece of currency and was commonly referred to as the Spanish dollar. It circulated in the Spanish colonies and far beyond the region. In 1821, the Central American colonies attained independence from Spain, and the newly independent countries formed the Federal Republic of Central America and adopted the Central American Republic real as their new currency.
Central American Republic Real
The Central American Republic real was the official currency in circulation in Honduras, Costa Rica, El Salvador, Guatemala, and Nicaragua. Introduced in 1572, it was equal in value to the Spanish colonial real. The currency existed in the form of gold and silver coins. Although Nicaragua gained independence from the Federal Republic of Central America in 1838, the country continued to use the Central American real as its legal tender until 1878. The country then adopted the Nicaraguan peso the same year.
The Nicaraguan peso was the first official currency of independent Nicaragua. The currency was issued at the exchange rate of 8 reales for one Nicaraguan peso. One peso was subdivided into 100 centavos. The National Treasury issued coins made of silver or nickel in denominations of 1, 5, 10, and 20 centavos. Banknotes were also issued in denominations of 5, 25, 50, and 100 pesos. The currency was soon replaced by the Nicaraguan córdoba due to frequent devaluations.
Nicaragua abandoned the peso on March 20th, 1912. The Nicaraguan córdoba was introduced as the new legal tender in the country. Like the Nicaraguan peso, each unit of the new currency was composed of 100 centavos. When it was introduced, the Nicaraguan córdoba was equal in value to the US dollar. The currency was issued in the form of bronze, cupronickel, and silver coins. Banknotes were also supplied by the country’s central bank in denominations of 10, 25, and 50 centavos, as well as 5, 10, 20, 50, and 100 córdoba. The currency has suffered from high inflation, which has resulted in the loss of value in the córdoba. Larger banknote denominations of 500 and 1000 córdoba have been issued to make it easier to complete large transactions.
Other Forms of Currency in Nicaragua
Although the córdoba is the official currency in Nicaragua, the US dollar is widely used in the country, particularly in hotels and tourist sites. Banks readily exchange international currency for the Nicaraguan córdoba. Most businesses in the country have also adopted electronic banking. Visitors can use debit and credit cards, which has improved business in the country.