- Decision
- Lower
- Rate change
- 25 bps
- monetary reference rate
- 6%
The Central Bank of Nicaragua (BCN) cut its one-day Monetary Reference Rate (TRM) by 25 bp to 6.00 % on 2 October 2025, arguing that lower and more stable domestic inflation, solid economic growth and balanced macro-financial conditions allow for a modest easing despite a still-uncertain global backdrop. After holding the TRM at 6.25 % from February through September, the BCN has now moved to reduce rates. To align operating conditions, the overnight monetary repo and deposit facility rates were lowered to 7.25 % and 4.75 %, respectively. The bank highlighted continued disinflation driven by softer food and services prices, ongoing GDP expansion supported by private-sector credit growth and strong exports, and a labour market with low unemployment. Firm international reserves and a stable exchange-rate regime were cited as additional anchors. Globally, growth is slowing and disinflation remains uneven, with geopolitical and trade tensions posing upside risks to prices even as advanced economies begin trimming policy rates while retaining a restrictive stance. The BCN will keep monitoring domestic and external indicators and stands prepared to adjust the TRM as warranted.
Rate evolution
From September 2025 to January 2026, the Central Bank of Nicaragua lowered its policy rate by 50 basis points from 6.25% to 5.75%, cutting in October, pausing in November and December, and easing again in January. The bank linked this path to lower international interest rates and domestic monetary conditions, alongside a domestic backdrop of falling and then stable inflation as food and related service pressures eased, continued economic growth supported by internal demand, exports, private-sector credit and external flows, and a labour market with low unemployment and rising formal employment. Throughout, it said global inflation was declining only slowly and unevenly and that advanced economies remained restrictive despite rate cuts, while uncertainty around geopolitical and commercial tensions could affect international prices, supply chains, financial markets and the global outlook. In the latest decisions, it again cited low and stable inflation, currency and exchange-rate stability, stronger reserves and healthy financial intermediation as support for the January cut, while stressing that unexpected global shocks remain the main risk and that the rate will be adjusted as needed.