devaluation of currency

Submitted by acc724 on 21 May, 2008 - 11:43.

I have been hearing a lot of rumors about them devaluing the Cordoba.Anyone else hear anything.I´m in the process of buying some property and the sellers want cords.I don't really want to change any money from dollars to cords..thanks

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Just being nosy

Submitted by dirtbag on 24 May, 2008 - 20:09.

why does the seller want cordobas and not dollars?

This is common

Submitted by fyl on 25 May, 2008 - 06:09.

Some people like local currency—whether good or bad. I would understand not wanting, for example, Canadian dollars as there are no banks that work in them here but a currency that is easy to convert here seems to make sense.

You have your choice of three: cordobas, US dollars and Euros. With cordobas being indexed to the falling US dollar, if I get a choice I would certainly take Euros.

U.S. Currency Devaluation

Submitted by fyl on 24 May, 2008 - 16:00.

A friend just send me a link to a Consumer Price Index calculator compliments of the U.S. Federal Reserve. Two reasons I posted the link here:

  1. As the Cordoba is indexed to the U.S. dollar, it can help you calculate the real value lost of your Nicaraguan money.
  2. It's just pretty scary. For example, I tried a simple "I have $1 in my pocket today. What was the equivalent in 1950 dollars?" test. The answer was $.11.

That's about right!

Submitted by dixietraveller on 24 May, 2008 - 16:57.

In 1950, for about 10-11 cents, you could buy (sometimes with change leftover) two bottles of coca cola or a hot dog or a bus ride or two phone calls or three first class letter stamps (3 cents each). But of course, let's forget what wages and salaries were in 1950! Heaven would be 2008 salaries and wages and 1950 prices! As much as some of us might complain about US inflation, there is always Zimbabwe to help us keep our perspective clearer! http://news.yahoo.com/s/ap/20080521/ap_on_re_af/zimbabwe_1

O quantum est in rebus inane! / A palabras necias, oídos sordos.

I know the answer! The answer lies within the heart of all mankind! The answer is twelve? I think I'm in the wrong building. - Peanuts (Charles M. Schulz)

There are those rumors and

Submitted by ptiffer on 23 May, 2008 - 17:41.

There are those rumors and others, since a last year about the economy However, at the moment, nothing have happened, my advice is:

If you are going to buy a property, go with the seller to the bank and do the closing over there, pay to him in the bank, So you will be able to do the payment the same day with any risk.

It will be safe for you and for the seller.

Good luck

Paul

Paul. Thanks for your on the ground comments.

Submitted by dirtbag on 24 May, 2008 - 19:35.

However, if I could ask., can you please elaborate on what is " So you will be able to do the payment the same day with risk"? How does this process mitigate the risk? Thanks.

CORDOBAS

Submitted by ptiffer on 31 May, 2008 - 18:48.

First of all, I am sorry for my delay.

If your concern is you are going to do a purchase and you are going to do the payment in Cordobas, according with seller request, my advice is do the payment at the same time your are going to get your dollars from the bank and you are not going to have any risk in the rate of exchange, if there is any devalution.

However nothing had happen about this "rumor".

Good luck

Devaluation

Submitted by Alra on 22 May, 2008 - 21:55.

According to El Banco Central de Nicaragua: Relative to the Dollar, the Cordoba will devaluate at a rate of 5% per year.

Reported by El Nuevo Diario of 5/12/08.

Al

I'll toss out an opinion

Submitted by fyl on 22 May, 2008 - 18:59.

Lots of people are reading this message but no comments. So, I will take a stab at it.

I am going to say not likely but, if there was such a thing, it would be minimal. The cordoba is already indexed to the US$ which is in the toilet making Nicaraguans a victim already. That is, the price of Chinese stuff, ... just keeps going up already.

I don't see anything the Nicaraguan government is doing that should have any big effect on the value of money here. Note that the colon in Costa Rica actually went up against the US$ recently even though it was "scheduled" to be indexed downward. That shows either how good CR is doing or how bad the U.S. is doing.

Now, if I wanted to discredit Ortega, picking a hot button would be the way to do it. Here are some.

  • Land confiscations -- This one has already been used a lot yet there is no evidence it is real.
  • Curtailment of press freedoms -- Another rumor that has been used.
  • Arming "rebels" somewhere. Haven't heard that one yet.
  • Mistreating people on the Atlantic Coast. Postponement of some local elections—right or wrong—already pushed that button.
  • Nationalizations. We saw that with the Esso tank farm and threats against UF. Seems that both of those threats just turned into reasonable business deals.
  • Currency devaluation.

There are certainly more but, particularly in an election year, I am guessing you are seeing button-pushing and nothing more.