Between May and June of this year, the average lending rate of commercial banks has fallen from 11.52% to 10.28%, a drop that is explained by the high level of liquidity of the banks and the low placement of credits.
The pandemic that caused the outbreak of covid-19 has hit the financial system, since due to the current market conditions, the active rates have come down between the months of May and July.
Since the beginning of the political crisis in the country, several banks have decided to close some of their service centers, and only during the first half of 2019 have 56 branches been reported closed.
In April 2018, the country plunged into a political crisis that has dragged the economy into recession. As a result of this problem, official figures indicate that 49 bank branches were closed last year and 56 more were closed between January and June 2019.
In Nicaragua, between the end of March and the beginning of September, deposits in the banking sector fell by 19%, affected by the socio-political crisis in the country.
According to the most recent data from the Central Bank of Nicaragua (BCN), deposits in foreign currency up to September 6 totaled $3.31 billion, less than the $3.34 billioncounted at the end of August. In the case of deposits in córdobas, they reported a slight increase in the periods in question, rising from 35,326 million to 35,595 million.
The bill against money laundering which is making progress in the National Assembly, includes prohibiting corporations from issuing bearer shares.
The Justice and Legal Affairs Committee of the National Assembly approved the ruling of the new Law against Money Laundering, Financing of Terrorism and Financing the Proliferation of Weapons of Mass Destruction.
As of September, credit granted by the financial system registered a year-on-year increase of 16%, driven by commercial credit and personal loans, which grew by 14% and 15%, respectively.
From a financial report by the Central Bank:
The financial system remains stable as of September. The loan portfolio grew by 15.6 percent year-on-year.The risk indicators continue below the average for the region and the liquidity of the system was above 31 percent. In relation to deposits,an interannual growth of 8.7 percentwasobserved (10.9% in September 2016).Finally, the indicators on profitability, solvency and capital have been found to be stable throughout the year.
Resources from bank funds totaled $128 million, thanks to increased deposits and other net liabilities, and a decrease in investments made abroad.
From a statement issued by the Central Bank:
The Central Bank of Nicaragua (BCN) reports that on March 18, 2016 it has published its Monetary and Financial Report for the month of February 2016.
The NCB report notes that balances the national financial system (SFN by its initials in Spanish), in January 2016, showed a favorable performance. Therefore, the balance of the loan portfolio of the SFN registered a growth of 21.9%, while total deposits recorded an increase of 13.8%. Meanwhile, liquidity in the financial system remained at adequate levels, placing the ratio of availability to deposits at 32.4%. Finally, profitability indicators remain on a positive trend, associated in part to with the improved quality of the loan portfolio.
From August 2014 to August 2015 more than 11,500 new jobs were created in institutions in this sector, which represents an annual growth of 18%.
The employment data in the sector reflects the fact that "... the Nicaraguan financial system continues to perform well, with healthy growth in deposits and the loan portfolio."
An article on Elnuevodiario.com.ni reports that "...
At the end of June the credit portfolio of the banking system recorded an increase of 21.5%, with loans to the commercial sector, personal and industry seeing the most demand.
Despite being the smallest national bank in the Central America, it is the one that has reported the highest growth in its loan portfolio during 2014, growing by 21.55% at the end of the first half of 2014.
In a year savings in the banking system both in local and foreign currency increased from $3.5 billion to $4.2 billion.
The economic dynamism has increased the savings capacity of Nicaraguans, which is reflected in the figures for savings and fixed term deposits in the domestic financial system.
From a Monetary and Financial report by the Central Bank of Nicaragua:
Having for years funded public spending with resources from the Venezuelan government, the country now plans to issue government bonds abroad.
The stable economic growth that Nicaragua has achieved in recent years has enabled the country to improve its financial position and has impacted positively on the country's risk perception on the part of international investors, giving it an important advantage in the event of a possible bond debt issue on the international market.
In light of the alarm generated by the proposal for the de-dollarization of the economy, the President of the Central Bank announced that there will be no change in the system of free convertibility of currencies.
An article in Elnuevodiario.com.ni reports that Ovidio Reyes, president of the Central Bank of Nicaragua, said that "... many people are concerned because they believe the government will start to add controls to the buying and selling of dollars. 'That will not happen, a key attraction of foreign investment has been the system of free convertibility of our currency and the dollar that exists in the country'. "
In March prices fell by 0.01% mainly due to reductions in the prices of food and non-alcoholic beverages, housing, water and electricity.
From a report by the Central Bank of Nicaragua:
March's Monthly inflation stood at -0.01 percent (0.13% in December 2013), mainly determined by price declines in the divisions of food and non-alcoholic drinks; housing, water, electricity, gas and other fuels; and communications, which in total contributed to -0.260 percentage points to the observed variation. It worth nothing that this decrease was partially offset by price increases in the divisions of transport and restaurants and hotels.
Between January and July 2013 financial institutions granted loans worth $3 billion, $574 million more than in the same period in 2012.
Globally, credit rose by 23.5% up to July, lower than that reported in the same period in 2012 when it was 32.8%.
Data from the Central Bank of Nicaragua (BCN), reveals that although funding to the agriculture and livestock sectors grew by more than 23%, the two remain the least attractive sectors for banks.
The extension allows the immediate disbursement of $ 20 million.
The Executive Board of the International Monetary Fund (IMF) today completed the fourth and fifth review of economic developments in Nicaragua under the Credit Facility Extended (SCA) and agreed to extend the agreement until December 4th, 2011.
The extension involves a reprogramming of disbursements as provided in the agreement.
The country and the IMF agreed to extend the three-year financial and economic program signed in October 2007 for two more months.
By signing the letter of intent (which must be ratified by the board of the International Monetary Fund-IMF), the economic program will conclude this next December and not on October 4th, as originally planned.
"The head of the bank said that once the agreement is ratified, the multilateral agency will disburse $36 million to Nicaragua. Nicaragua and the IMF concluded yesterday the second round of negotiations of the fourth and fifth review of the economic program, which both parties signed in October 2007".