Hyperinflation/Archive

Cases / Latin America's debt crisis / Nicaragua

Nicaragua
1986–1991

During the Contra war and the US trade embargo, the Sandinista government financed defence and subsidies with the central bank.

261%prices in the worst monthMarch 1991
16.4 daysfor prices to doubleat the peak (Hanke & Krus)
Jun 1986 – Mar 1991above 50% a monththe hyperinflation itself
1banknotes in the collectionCórdoba

Currency reform: 1 córdoba nuevo = 1,000 córdobas (1988) · Cause: Civil war, US embargo, a deficit paid by the central bank · Resolution: Peace, foreign aid, the dollar-linked córdoba oro

In short

Hyperinflation lasted almost five years (H&K: June 1986 – March 1991), one of the longest on record. The worst month came at the very end: 261 % in March 1991, prices doubling every 16.4 days (H&K). A 1988 reform cut three zeros; within two years notes were overprinted up to a million córdobas. The dollar-linked córdoba oro ended it.

The curve

Córdobas (pre-1988) per 1 USD (córdoba nuevo converted back, ×1,000), logarithmic scale: each line up is many times the one below.

10 1,000 100,000 10 million 1 billion 1987 1988 1989 1990 1987-01: 70 1987-06: 1,000 1987-12: 5,500 1988-02: 10,000 1988-06: 90,000 1988-12: 920,000 1989-06: 15 million 1989-12: 45 million 1990-02: 180 million 1990-06: 1.5 billion 1990-12: 3.2 billion

"Operación Berta" (14 Feb 1988) replaced 1,000 córdobas with 1 córdoba nuevo; later points are converted back into old córdobas. Hyperinflation ran from June 1986 to March 1991 and peaked at 261% in March 1991 (Hanke & Krus). Approximate series, kept for its shape; individual points are not sourced one by one. Source: Banco Central de Nicaragua.

What happened

The events in order, with the banknotes at the date on them.

dated
1985
200,000 córdobas, overprinted on a 1,000 córdobas of 1985
200,000 córdobas, overprinted on a 1,000 córdobas of 1985
Jun 1986
Monthly inflation passes 50 % (H&K start).
1988–1990
Notes overprinted from 10,000 up to 1,000,000 córdobas.
14 Feb 1988
Operación Berta: córdoba nuevo at 1,000 : 1.
1990
The córdoba oro is introduced at par with the dollar.
Mar 1991
Peak 261 % (H&K) during the conversion; the episode ends.

Context: why it happened

  • The US embargo (from 1985) cut trade and credit.
  • Central-bank financing of the deficit and of subsidised state enterprises; price controls that emptied the shops.

Consequences & lessons

  • Overprinting old notes with bigger numbers is the cheapest sign a state is printing faster than it can design notes.

The banknotes

200,000 córdobas, overprinted on a 1,000 córdobas of 1985
200,000 córdobas, overprinted on a 1,000 córdobas of 1985

The data

figurevaluesource
Hyperinflation (≥ 50%/month)Jun 1986 – Mar 1991H&K
Peak monthMarch 1991H&K
Peak monthly inflation261 %H&K
Doubling time at peak16.4 daysH&K
Redenomination14 Feb 1988 ("Operación Berta"), 1 córdoba nuevo = 1,000 córdobasWikipedia (Nicaraguan córdoba)
Largest overprintsup to 1,000,000 córdobas (on the 1,000)Wikipedia (Nicaraguan córdoba)
The series, point by point
Monthold córdobas/USD
1987-0170
1987-061,000
1987-125,500
1988-0210,000
1988-0690,000
1988-12920,000
1989-0615 million
1989-1245 million
1990-02180 million
1990-061.5 billion
1990-123.2 billion
Case data (JSON)Series (CSV)Banknotes (ZIP)
Cite this case
“Nicaragua 1986–1991”, Hyperinflation Archive, hyperinflation.rogzy.org/nicaragua-1987-1990/ (2026). Figures: Hanke & Krus (2012) and the sources listed below.

Sources

  1. Hanke & Krus (2012) — episode, peak, doubling time.
  2. Wikipedia, "Nicaraguan córdoba" (read 2026-10-05): https://en.wikipedia.org/wiki/Nicaraguan_c%C3%B3rdoba

H&K = Hanke, S. H. & Krus, N. (2012), World Hyperinflations, Cato Institute Working Paper no. 8.