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Highest Financial Reserves on Record for Nicaragua: $1.9 Billion

Article Summary:

Gross International Reserves (GIR) of Nicaragua reached its highest peak in the last 10 years with a record of $1.938 billion. The revenue, say government officials, is a sign of a stable macroeconomic environment and the country is better prepared to respond positively to economic stress such as the recession of 2008 and 2009.

Photo Credit: Prensa Nicaragua

Original Article Text From Prensa Nicaragua via Google Translate :

Nicaragua reserves record

Gross International Reserves (GIR) of Nicaragua reached the historical record 1.938.2 billion, bringing the country increased their supplies of foreign exchange to finance at least three months of imports and face a possible emergency, while at international level continues the upward climb of oil prices.

This is a peak in the last ten years. Mario Arana, former Central Bank of Nicaragua (BCN), consider this “very positive”, recalling that the RIB “are basically the country’s savings,” which show its macroeconomic stability, “allows you to be better prepared” to situations economic stress as the recession of 2008 and 2009.

Arana said that Nicaragua has managed monetary policy of fiscal discipline gives “peace of mind” as to take actions to counter future external shocks in 2012, when again the world economy is facing problems.

The RIB resources consist of the NCB, the central government deposits, the reserve requirements of banks and the Guarantee Fund of Banking Deposits (Fogade). The recent annual report states that NCBs other determinants in the “excellent” performance of the RIB in 2011 were the flow of loans and grants, received from abroad, and the liquidity of commercial banks.

For Arana levels of international reserves are good presentation to the International Monetary Fund (IMF), to be running the previous macroeconomic evaluation of the agreement and the revision of Article IV, which refer to the state of the finances of Nicaragua.

Now, he says, “challenges” will ensure the sustainability of pensions, health system power and domestic debt.

For his part, economist Adolfo Acevedo noted that Adjusted Net International Reserves (Rinas), which does not include bank reserve requirements or Fogade-were reduced $ 25.7 million over the record level reached in December 2011. The Rinas is the reference used in the program with the IMF.

By mandate of the Organic Law of the NCB, the agency is managed by international reserves, following the policies dictated by its Board of Directors to ensure their efficient operation under the criteria of safety, liquidity and profitability. Former President of BCN, Mario Arana, said: “We must take care and we must always keep a good planning and maintenance costs” of them.

Link to Original Article:

From Prensa Nicaragua

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