Nicaragua closed the first two months of this year with $5.607.1 million, an increase of 160.1 million dollars over the balance of December last year and $925.5 million compared to the balance of a year ago, according to figures from the Central Bank of Nicaragua (BCN).
In February alone, the top bank issuer accumulated $135.5 million, representing 3.3 times the coverage of the monetary base. This gives stability to the exchange regime, which is no longer based on microdevaluations at the moment but on the supply and demand of dollars in the domestic market.
According to the NCB, the increase in February was mainly due to net foreign exchange purchases at the bank’s exchange table and the entry of external resources into the Non-Financial Public Sector. Only the latter got $39 million. Another 155.7 million were obtained through transactions in the sale and purchase of foreign exchange.
In addition, the Central Bank received a $17.8 million turnaround in interest payments for its overseas reserves and the non-financial public sector increased its availability by $34.9 million.
Among the accumulations of reserves in February is the payment of the service of the foreign debt of 68.6 million dollars and 12.9 million in placements on the stock market. Also 11.3 million per reduction in lace in foreign currency.
More than $3 billion in five years
In this way, Daniel Ortega’s regime continues to underpin the strength of the reserves, which also guarantee it the internal and external payments of the Government, strengthens the exchange rate regime, and helps the country’s macroeconomic and financial stability.
In fact, the government had to expedite after 2018, the accumulation of international reserves, after 2019, a rapid decumulation, put the exchange regime of the córdoba in check against the dollar, which generated concern about a possible devaluation. The fall in reserves was due to the support that the Central Bank had to deploy to the national banking system in the face of the massive flight of deposits from the public, due to the increase in uncertainty generated by the political crisis, which remains unresolved.
Since December 2018, the regime has increased international reserves by $3.345.96 million. At the end of that year, the balance was $2,261.14 million and in 2019 it had fallen to $2.397.44 million.
In 2020, in the midst of the impact of the pandemic and also after two years of the Ortega regime in the multilaterals where the Nica Act exerted pressure, the Government was favored by the impact of two hurricanes and the impact of the health crisis that allowed it access to resources considered to be humanitarian care, which caused resources to flow significantly in 2021, some of which continue to enter into disbursements and are in the NCB’s coffers.
But the regime also ordered the transfer of resources from tax collection to international reserves. This was in the wake of the tax reform it pushed in 2019. As of December last year, this balance had risen to 56,880.9 million córdobas, when in December 2018 there were 12,2,303.1 million córdobas.
This article has been translated from the original which first appeared in La Prensa NI