Since 1912, Nicaragua ’s currency has been the córdoba, named after Francisco Hernández de Córdoba, the Spanish founder of the colony of Nicaragua. It is divided into 100 centavos or 10 reales. In common usage, the córdoba is also referred to as a peso. The U.S. dollar is also an official currency in Nicaragua and the only foreign currency you can hope to exchange (although many communities along the Río San Juan  also use Costa Rican colones).
Under the Sandinistas, inflation ran to 30,000 percent. These days the córdoba is better managed and essentially stable, but to offset inflation, it is being steadily devalued at the rate of approximately US$0.37 every six months. You can do the arithmetic yourself before arriving in Nicaragua (the exchange rate is currently hovering around 20 córdobas to 1 dollar, making for simple calculations), or find the actual rates at the Central Bank of Nicaragua’s website, www.bcn.gob.ni .
In 2003, a new C$500 bill was introduced, and in 2007 the ratty old paper bills were phased out in lieu of crisp, newly designed currency that feels a bit like there’s some plastic wrap mixed in with the paper. Be careful about confusing the C$20 and C$200 bills.
Since this travel guide was first published in 2002, two things have made money management a lot easier: widespread use of U.S. dollars, and dramatically increased prevalence of ATMs. Travelers should bring U.S. dollars, preferably, or euros otherwise, as hardly any other currencies can be exchanged in Nicaragua, including those of the neighboring countries (exchange your Costa Rican or Honduran currency on the border before entering). Make sure your greenbacks are good quality, as ripped, tattered bills may be refused.
While it’s easier to change money and travel using córdobas, virtually any merchant will take dollars these days, and give you the bank rate (which means you too need to know what the bank rate is, just to be sure) as change; they usually have trouble breaking anything bigger than a twenty-dollar bill. ATMs, known in Spanish as cajeros automáticos, litter all major cities and bigger gas stations; you won’t find them outside of the cities though, so plan accordingly. They dispense both córdoba (unfortunately, often in the larger, C$500 denominations) and U.S. dollars, and take cards from the Cirrus and Star networks, plus most Visa and Mastercards. Of course you will pay a bank fee for each withdrawal, but it’s worth it.
You cannot rely on just one card, as some establishments will accept Visa but not MasterCard, or the opposite. And make sure you have photocopied front and back of your cards and stashed the page somewhere safe, in case they are stolen; likewise, inform your credit card companies you will be traveling in Nicaragua so they don’t balk and block your card, thinking the sudden spate of charges in Nicaragua indicate theft.
Travelers checks are nearly impossible to change in banks, and at exceedingly bad rates. Travelers checks for currencies other than U.S. dollars will not be cashed. You will need to show your passport to cash travelers checks, and be sure that your signature matches your previous one or you’ll convert your precious dollars into a worthless piece of paper. Some banks actually demand to see your original receipts (the ones you are supposed to keep physically separate from the checks!). If you truly get stuck, every Nicaraguan city has a branch of Western Union, permitting family back home can wire you money, for a steep fee (up to 25 percent).
Unless noted otherwise in this travel guide, all bank hours are 8:30 a.m.–4 p.m. Monday–Friday and 8:30–noon Saturday. Nicaraguans receive their pay on the 15th and 30th or 31st of every month (días de pago are the best nights to go out dancing in Managua  and beyond). Should you need to go to a bank on those days, you can expect the lines to be extra long. Bide your time by watching businesspeople carry away large sums of cash in brown paper lunch bags.
Nicaragua remains a budget travel destination, with generally cheaper prices across the board than nearby Costa Rica and Belize. You can comfortably exist in Nicaragua on $50 per day, or half of that by eating the way the locals do and forgoing the jalapeño steak and beer. Budget travelers interested in stretching their money to the maximum should eat at fritangas and market stalls, take the slow bus, and stay at the simplest hospedajes. In Granada , León , and Managua , you can now choose to pay $50–150 for a room, so budget accordingly if you prefer extra comforts (like air-conditioning, security, and cleanliness).
Nicaragua’s sales tax (IGV or Impuesto General de Valor) is a whopping 15 percent—the highest in Central America. You’ll find it automatically applied to the bill at nicer restaurants, fancy hotels, and upscale shops in major cities: check on your receipt, where it should be clearly indicated. Elsewhere, sales tax is casually dismissed. Should you decide to splurge on a fancy dinner (places where you’d expect to spend more than $6–10 a meal), expect to pay 25 percent of your bill for tax and tip. Prices in this travel guide usually do not include the IGV/ If a hotel does not charge you this tax, they (and you) are breaking the law.
In better restaurants, a 10–15 percent propina (tip) will be graciously added on to your bill, even if the food was undercooked, the beer flat, and the service atrocious. You are under no obligation to pay it if it is unmerited. You might want to give a little something after getting your hair cut: 10 percent is appropriate. Skycaps at the International Airport in Managua will jostle to carry your luggage out to a waiting taxi for about $2. Taxi drivers and bartenders are rarely tipped and don’t expect to be unless they are exceptionally friendly or go out of their way for you. If you accept the offer of children trying to carry your bags, find you a hotel, or anything else, you have entered into an unspoken agreement to give them a few córdobas:
(5–20 córdobas or $1 or less).
Looking for a good deal is a sport in Nicaragua—half social, half business, and is expected with most outdoor market vendors and taxi drivers. But be warned: Bargaining in Nicaragua is al suave! Aggressive, prolonged haggling is not cool, won’t affect the price, and may leave ill feelings. To start off the process, after you are given the initial price, act surprised and use one of the following phrases: “¿Cuánto es lo menos?” (“What is your lowest price?”) or “¿Nada menos?” (“Nothing less?”).
Remember these guidelines when bargaining:
• Bargaining is social and friendly, or at least courteous. Keep your temper under wraps and always smile.
• Go back and forth a maximum of two or three times, and then either agree or walk away. Remember that some Nicaraguans, to save face, may lose a profit.
• Once you make a deal, it’s done. If you think you’ve been ripped off, remember the $2 you got overcharged is still less than you’d pay for a double-tall mocha latte back home. Keep it in perspective and be a good sport.
• When bargaining with taxi drivers in Managua , bargain hard, but agree on a price before you enter the cab—once the vehicle is moving, your leverage has vanished in a puff of acrid, black exhaust.