- Decision
- Lower
- Rate change
- 25 bps
- Monetary reference rate
- 5.75%
The Central Bank of Nicaragua (BCN) cut its Monetary Reference Rate (TRM) by 25 bp to 5.75 % on 8 January 2026, citing lower and stabilising domestic inflation alongside solid economic growth and easing global financial conditions despite heightened external risks. The move follows two 25 bp reductions since October 2025, which have taken the TRM down from 6.25 %. To align operating conditions, the overnight Monetary Repo and Deposit window rates were trimmed to 7.00 % and 4.50 %, respectively, with the TRM remaining the benchmark for one-day córdobas liquidity operations. The Central Bank highlighted sustained output expansion across most sectors, buoyant private-sector credit and external inflows, continued low unemployment, and a policy mix—including government subsidies and the exchange-rate framework—supportive of a “low and stable” inflation outlook. It noted that monetary policy has also underpinned currency stability and strengthened international reserves. Externally, global growth is slowing and inflation is easing unevenly amid persistent geopolitical and trade uncertainties, while advanced economies have started lowering rates but keep an overall restrictive stance. The BCN said it will keep monitoring domestic and external indicators and stands ready to adjust the TRM when necessary.
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.