The Central Bank of Nicaragua reported, on Tuesday, July 20, 2026, that it is using its financial reserves to guarantee the stability of fuel prices in the country. The measure comes in response to the rise in oil prices on the international market, a direct consequence of the current conflicts in the Middle East.
The initiative aims to prevent adjustments in transport tariffs and national production costs, according to an analysis. However, there is a warning that the State’s financial capacity may be compromised if the global situation of high prices continues.
Impact on production costs and BC strategy
Ovidio Reyes, president of the Central Bank, detailed in a statement that the appreciation of crude oil has generated a significant impact on production in Nicaraguan territory.
Reyes emphasized that the effect extends to the costs of several essential materials, not limited to just fuel. He further clarified that the institution used previously accumulated funds, describing the action as a resource to the country’s “own strength” to preserve economic stability.
Use of reserves and variations in local prices
Information indicates that the government decided to use existing financial reserves to stabilize fuel prices and prevent sudden increases. Despite this measure, the impacts of global pressure are already noticeable on the country’s economy.
In the first five months of 2026, the cost of a basic food basket rose by C$551.22, equivalent to around US$15.10. In December, the value was C$20,821.68 (approximately US$569.50), reaching C$21,372.90 (approximately US$584.60) in May. This increase is directly linked to the influence of international values on prices charged internally.
Economic analysts point out that directing state reserves to subsidize, for example, gasoline, could reduce the response capacity of public finances if the high international situation persists. The sustainability of this strategy, therefore, will depend on the evolution of conflicts in the Middle East and the amount of resources available in the country.
Remittances and strong external economic dependence
In his speech, Reyes defended the transition to local currencies in global trade, in line with the BRICS bloc’s perspective, and the move away from the dollar. Despite this, figures released by the Central Bank of Nicaragua reveal that the country’s economy still has a significant dependence on remittances from the United States.
In the first quarter of 2025, the amount of remittances originating from the United States reached US$1.208 billion. Throughout 2025, total annual remittances reached around US$6.167 billion, with US$5.168 billion coming from the USA, which represents 83.8% of the total received.
