- Decision
- Maintain
- Rate change
- 0 bps
- Monetary reference rate
- 5.75%
The Central Bank of Nicaragua (BCN) held its Monetary Policy Reference Rate at 5.75% in October, citing low and stable domestic inflation, continued economic growth and solid macroeconomic balances. The rate has remained at this level since a 25-basis-point cut from 6.00% in January 2026. The BCN also maintained its one-day monetary repo and deposit facility rates at 7.00% and 4.50%, respectively. Growth continues to be driven by broad-based activity, domestic and export demand, external inflows and robust private-sector credit, while unemployment remains low despite moderating formal employment. Strengthened international reserves continue to support the national currency and exchange rate. Globally, geopolitical uncertainty and trade tensions are affecting prices and the growth outlook, while a prolonged inflation rebound has prompted major central banks to raise rates and maintain restrictive policy for longer. The BCN will monitor external and domestic indicators and adjust the reference rate when necessary.
Rate evolution
From September 2025 to October 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, easing again in January and holding on March 5, April 9, May 7, June 5, July 2, August 6, September 3 and October 14. It linked this path to international interest rates and domestic monetary conditions, alongside falling and then stable inflation as food and related service pressures eased, continued economic growth supported by domestic demand, exports, private-sector credit and external flows, and a labour market with low unemployment and moderating formal employment growth.
Throughout, the Central Bank of Nicaragua said global inflation was declining slowly and unevenly and that advanced economies remained restrictive despite rate cuts, while geopolitical and trade uncertainty was affecting international prices and supply chains and could weaken a global outlook already facing prospects of slower growth and labour-market risks. After saying in April, May and June that restrictive monetary policy in advanced economies could persist if energy prices remained elevated, it noted in July that uncertainty had moderated but continued to affect prices and growth prospects, warned in August and September that persistent geopolitical uncertainty and trade tensions could prolong restrictive policy, and said in October that the recent inflation upturn had led major central banks to raise rates.
For the March through October holds, it cited continued domestic growth, expectations that inflation would remain low and stable, currency and exchange-rate stability, stronger international reserves, favourable conditions for financial intermediation and balanced macroeconomic conditions, while government subsidies and exchange-rate policy continued to support price stability. It continued to flag global risks, warning from April through October that geopolitical events could lift international inflation and pass through to local prices, while adding from June through October that climatic conditions could affect domestic prices, and said it would adjust the policy rate as necessary.