Nicaragua is exploring the possibility of integrating with Russia’s Mir payment system, which could significantly reduce the Central American nation’s dependence on the US dollar.
This consideration comes in the wake of Visa and MasterCard suspending their operations in Russia due to the country’s conflict with Ukraine in 2022.
During the St. Petersburg International Economic Forum (SPIEF), Laureano Facundo Ortega Murillo, the Advisor for Investments, Trade and International Cooperation of the Nicaraguan presidency, indicated that the country is observing how the Mir system functions in Cuba.
The system, introduced there in March, has enabled Cuban citizens to withdraw cash from local ATMs.
Ortega Murillo commented, “We’re now looking into using alternative means, including the ruble, seeking opportunities towards de-dollarization, and striving to reduce the significant influence of the dollar, which has historically dominated global economics.”
Nicaragua has intentions to adopt the Mir system, which was launched in 2015 and is also accepted in Turkey, Vietnam, South Korea, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, South Ossetia, and Abkhazia.
“We see that we have that experience in Cuba, and we are trying to adopt it in Nicaragua, training our specialists,” Ortega Murillo added.
The country also seeks to develop its relationship with Russia in multiple areas including transportation, food, healthcare, energy, investment, and banking.
However, Ortega Murillo acknowledged that a lack of mutual understanding between the two countries business communities could pose a challenge to this endeavor.
Iván Acosta, Nicaragua’s Minister of Finance and Public Credit, recently spoke at the Eurasian Economic Forum-2023 in Moscow.
He suggested that Latin American, African, and Eurasian countries must seek “alternatives” and “new platforms” in 2023 to reduce their reliance on the US dollar.
Notably, despite these plans for closer ties with Russia, the United States remains Nicaragua’s main trading partner.
The US accounts for one-third of Nicaragua’s imports and around 61% of its total exports, according to recent data from the US embassy in Managua.
Moreover, nearly 80% of the almost US$3.225 billion that Nicaragua received in family remittances in 2022 came from migrants in the United States, as the Central Bank of Nicaragua (BCN) reported.