New foreign exchange and currency trading regulations in Nicaragua

The Central Bank of Nicaragua (BCN) has recently approved new regulations to govern the foreign exchange market and currency trading. Resolution CDMF-XIV-3-2025 replaces the previous regulations in force since 2007 and represents an important step toward modernizing the national financial system.

I- Foreign exchange market

The foreign exchange market is where foreign currencies, such as dollars, euros, or other freely convertible currencies, are bought and sold. This market allows international transactions—such as importing products, paying for services abroad, or receiving remittances—to be carried out legally, orderly, and securely.

II- Role of the Central Bank

According to the Political Constitution of Nicaragua and its Organic Law, the Central Bank is responsible for defining and executing monetary and exchange rate policy. This includes controlling the issuance of the córdoba, ensuring currency stability, preserving international reserves, and supervising the purchase and sale of foreign currency in the country. The objective is to contribute to the protection of the country’s economic stability.

III- Relevant aspects of the new regulation

The new foreign exchange market regulation governs several important elements:

1. 1. Authorized participants: The list of participants in the foreign exchange market is defined. In addition to the Central Bank and banks regulated by the Superintendency, the following are now included:
      • The Government;
      • Foreign exchange service providers regulated by the BCN;
      • Other entities or persons authorized by the Central Bank itself.
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   2. General public: Any natural or legal person in Nicaragua may freely buy and sell foreign currency in any amount and for any reason, provided that they comply with the legal provisions in force (such as the rules to prevent money laundering).
   3. New BCN intervention mechanisms: The Central Bank may buy or sell foreign currency using various instruments such as:
      • Spot transactions (immediate);
      • Forward transactions (agreements to exchange foreign currency at a later date);
      • Auctions.
      • Other mechanisms it may authorize.
   4. Regulatory powers: The Central Bank shall approve the terms and conditions governing its foreign exchange operations with foreign exchange market participants, including the determination of the different operating mechanisms and their modalities.

IV- Why is it important?

Having clear and modern rules for the foreign exchange market is crucial for the proper functioning of the economy. In an increasingly dynamic global environment, Nicaragua needs an updated regulatory framework that is agile and consistent with international best practices.