In the first nine months of the year, trading volume totaled $8.318 million, 20% lower than the same period in 2018.
From the NCB report:
In the third quarter of 2019, the volume of foreign exchange operations (purchases + sales) in the foreign exchange market totaled 2,671.7 million dollars, of which 1,361.1 million dollars corresponded to purchase operations of intermediary agents1 (US$1,401.1 million in the previous quarter), and 1,310.6 million dollars in sales (US$1,296.4 million in the previous quarter). Thus, the net result of operations in the exchange market was net purchases of 50.5 million dollars in the third quarter, as a result of a greater demand for cordobas by the economy.
In the first seven months of the year, trading volume totaled $6,548 million, 20% lower than the same period in 2018.
From the Central Bank of Nicaragua report:
According to published statistics, in July there were lower pressures in the exchange market, which led to lower volumes of purchases and sales of foreign exchange, observing a reduction in the exchange gap when compared to those recorded in the same month last year.
In the first four months of the year, trading volume totaled $3.873 million, 19% less than the same period in 2018.
From the Central Bank of Nicaragua report:
According to official statistics, the volume of exchange market operations in April totaled 924.7 million dollars (US$38.5 million daily average), showing a 0.97% decrease with respect to the level registered in the previous month.
The volume of operations totaled $2,948 million during the first quarter of the year, registering a 19% decrease with respect to the same period in 2018.
From the Central Bank of Nicaragua report:
The volume traded (purchases + sales) of foreign currency in the exchange market during the first quarter of 2019 was 2,948.3 million dollars (daily average of US$38.8 million), showing a decrease of 18.9 percent over the first quarter of the previous year, mainly because of the decrease in financial sector operations with the public.
During last year, family remittances sent to the country totaled $1.501 million, 7.9% more than the $1.391 million reported in 2017.
In terms of year-on-year growth, Nicaragua ranks fifth as a recipient of family remittances at the regional level. Remittances to Honduras registered the highest growth in the region, 14%, followed by Guatemala (13.4%) and the Dominican Republic (10.4%), according to a report by the Central Bank of Nicaragua (BCN).
The volume of operations totaled $3.413 million during the fourth quarter of 2018 in Nicaragua, recording an increase of just 1% over the same period in 2017.
From the Central Bank of Nicaragua report:
The volume traded (purchases + sales) of foreign currency in the exchange market totaled 3,413.0 million dollars during the fourth quarter of 2018 (daily average of US$44.3 million), showing a 1.1 percent increase with respect to the fourth quarter of the previous year, mainly because of the increase in the operations of the BCN's foreign exchange desk with banks and financiers.
For the first time in nine years, the Federal Reserve has raised the benchmark interest rate, by 0.25%, starting off a process of a gradual adjustment which will make credit more expensive.
After seven years of interest rates at historical lows, signs of recovery in the US economy have led the Federal Reserve to announce the first upward adjustment in the federal funds rate, the main reference rate for structuring interest rates in the United States and around the world.
The idea of de-dollarization of the Nicaraguan economy was short-lived, after having set off various alarms in academic and business environments.
After several days of national discussion on the issue, the Central Bank has ruled out the possibility.
An article in Elnuevodiario.com.ni reports that "the President of the Central Bank of Nicaragua, BCN, Ovidio Reyes said on Wednesday that the current system of coexistence between the dollar and the Cordoba has worked in the country, therefore they have ruled out the dedollarization of the Nicaraguan economy. "
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'. "
Some companies can become richer than others overnight, depending on decisions made by a few public officials.
Editorial
An article in Elfinancierocr.com reports on the positive effects of the devaluation of the national currency of Costa Rica, the-Colón, agains the dollar, for exporters in the country.
The causes of the devaluation were mainly external, but were catalyzed by decisions made by public officials, the Central Bank, whose missive it is to defend the value of the national currency, because this supposedly contributes to the economy.
In the next two years, the RMB or Chinese yuan could become one of the major currencies used in global trade.
This was said in London by Douglas Flint, chairman of HSBC Holdings SA, adding that "the renminbi (RMB) will be a growing part of normal business in the everyday life for anyone who trades or invests in China."
"All international business with an eye on China should consider the potential benefits of using the RMB and the investment opportunities in RMB that have been created around the world with the support of the burgeoning overseas markets, particularly in foreign bonds markets," he said.
The Nicaraguan Livestock Federation wants the price of cattle sold to slaughterhouses to be set in dollars.
According to an article in Laprensa.com.ni, farmers have requested slaughterhouses to "dollarize the purchase price of livestock or recognize the slide in the value of the currency (five percent annually), as it triggers losses of $8 to $ 10 per cow.
With gold as a prime example, the recommendation to protect purchasing power is to diversify by acquiring natural resource assets, particularly productive land.
Although the European crisis has shown that despite the enormity of the U.S’s public debt, bonds that back it still have the confidence of many investors, the dollar as a reserve asset raises many doubts.
Good news for importers and store owners, bad news for exporters. Governments cannot afford to ignore this problem.
The causes of the appreciation in the value of Latin American currencies relative to the United States dollar are varied. The main reason is the current weakness of the US economy and the low expectations of a quick recovery. In addition, Central and South American economies are doing well, boosted by high commodity prices and the way their financial systems withstood the last crisis.
The recent increase in the value of the Costa Rican colon versus the dollar is worrisome, not only because there are no clear reasons to explain it, but also because it would be hard to contain it without causing greater problems.
In the past weeks, and without apparent reason, the price of the U.S. dollar in Costa Rica dropped considerably.
Last week we surveyed some financial operators as to why these movements where occurring, the general answer being: “we don’t know”.