Nicaragua Debt Upgraded Despite US Sanctions
NICARAGUA · CREDIT RATING
Key Facts
- The country Central American country led by co-presidents Daniel Ortega and Rosario Murillo, with US sanctions in force.
- Why it matters A higher rating usually lowers borrowing costs, but BB- is still below investment grade.
- What happened Nicaragua’s government credit rating moved from B+ to BB-, with a stable outlook, on 29 October 2026.
- What it means for you US sanctions, US duties and the State Department’s reconsider-travel advisory all stay in place.
- Still open The agency’s own growth, debt and deficit figures are not in the central bank’s announcement.
In Plain English
A sovereign credit rating is a letter grade that a rating agency gives a government to show how likely it is to repay its debts. S&P Global Ratings is a US credit rating agency whose scale runs from AAA at the top to D, and BBB- is its lowest investment-grade step.
The Central Bank of Nicaragua, known as the BCN, sets monetary policy and publishes the country’s official economic statistics. A stable outlook means the agency does not currently expect to move the rating up or down.
S&P Global Ratings raised Nicaragua’s government credit rating from B+ to BB- with a stable outlook on Thursday 29 October 2026, the Central Bank of Nicaragua announced the same day. The step is one notch up the agency’s scale, yet BB- is still speculative grade, below the BBB- floor that S&P sets for investment grade.
For US readers the decision tests how far a macroeconomic record can lift the standing of a country with a dedicated US Treasury sanctions program. The central bank says the agency credited prudent fiscal policy, lower government debt and growing reserves, while the State Department still asks Americans to reconsider travel to Nicaragua.
What Happened
The central bank published its announcement on Thursday 29 October 2026 and said the rating action came within the agency’s annual review of Nicaragua’s sovereign rating. It linked to the agency’s own press release, which is the primary document for the decision.
According to the central bank’s summary, the agency said the upgrade reflects the government’s sustained commitment to macroeconomic stability and prudent fiscal policy. That policy, in the agency’s reading as relayed by the bank, has produced an important reduction in government debt and a build-up of fiscal and external reserves.
The agency also pointed to a resilient financial sector with solid capital, liquidity and profitability, the central bank said. The stable outlook rests on continued prudent policy backed by strong fiscal and external reserves, in the bank’s account of the decision.
The Numbers Behind the Rating
Central bank data published in October 2026 put gross international reserves at US$10.08 billion at the end of September, or 4.5 times the monetary base, the money the bank issues. The bank estimates that the economy grew 4.1% in the first half of 2026 and keeps its 2026 forecast at 3.5% to 4.5%.
Growth cooled in July, when the bank’s monthly activity index rose 2.5% from a year earlier, against 3.9% for January to July as a whole. Unemployment was 3.1% and inflation 4% year on year, both in July, and the bank raised its 2026 inflation forecast to 3.5% to 4.5% from 2.5% to 3.5%.
The bank projects a current-account surplus of 7% to 8% of output for 2026, and its policy rate has stood at 5.75% since January. Public external debt was US$8.92 billion at the end of March 2026, or 54.6% of a US$16.35 billion external debt total that includes private borrowers.
Why It Matters
A rating upgrade tells lenders that the agency now sees a lower chance of missed payments by the government. Most of Nicaragua’s external debt sits with official lenders rather than markets, with 42.0% owed to multilateral lenders and 30.0% to other governments, against 3.3% to commercial banks.
In a televised interview that the bank published on 29 October, its president, Ovidio Reyes Ramírez, repeated that the bank will keep the córdoba, the national currency, steady against the US dollar through 2027. The bank’s October outlook note sets the planned devaluation at zero percent for 2026, which the bank says gives economic agents predictability.
Earlier coverage of Nicaragua’s record first-half exports gives the trade context for these figures. The guide to who runs Nicaragua’s economy maps the banks and state companies behind them, and the Nicaragua country page lists the rest of the coverage.
What It Means for You
For a US investor or lender the upgrade changes little in practice, because the Treasury’s Office of Foreign Assets Control keeps a Nicaragua-related sanctions program in force and licenses certain activity under it. Anyone with exposure to Nicaraguan banks, miners or state companies still needs to screen counterparties against the sanctions lists before acting.
US importers can check the Harmonized Tariff Schedule for the duty on each Nicaraguan product, because the US Trade Representative set Section 301 duties on Nicaraguan goods in notices published on 29 December 2025 and 28 July 2026. Travelers face a State Department advisory that tells Americans to reconsider travel to Nicaragua because of arbitrary enforcement of laws and the risk of wrongful detention.
What Is Not Known
The central bank’s note does not give the agency’s growth, debt or deficit estimates, so the size of the debt reduction it credits cannot be checked from the announcement alone. The agency’s own release, which the note links, could not be opened at publication, so the rating and its reasoning, including any view on political and sanctions risk, rest on the bank’s announcement alone.
It is not known whether other agencies will follow with an upgrade, or whether the stable outlook will hold if growth keeps slowing from the 4.1% of the first half. The central bank’s own July figure of 2.5% shows that the pace has already cooled.
Frequently Asked Questions
What is Nicaragua’s new S&P credit rating?
S&P Global Ratings rates Nicaragua BB- with a stable outlook after raising it from B+ on 29 October 2026, the central bank announced. BB- is speculative grade, below the BBB- investment-grade line.
Is Nicaragua investment grade now?
No, Nicaragua remains below investment grade. S&P’s lowest investment-grade rating is BBB-, three steps above the new BB- level.
Does the upgrade lift US sanctions on Nicaragua?
No, the rating is a credit opinion and does not change any US sanctions or trade measures. The Treasury’s sanctions program and the Section 301 duties on Nicaraguan goods are separate legal actions.
Is it safe for Americans to travel to Nicaragua?
The State Department’s advisory asks Americans to reconsider travel to Nicaragua because of arbitrary enforcement of laws and the risk of wrongful detention. It also advises increased caution because of crime.
Sources: Central Bank of Nicaragua, rating announcement, 29 October 2026; Central Bank of Nicaragua, Macroeconomic Outlook, October 2026; Central Bank of Nicaragua, monthly activity index for July 2026; Central Bank of Nicaragua, external debt report, first quarter 2026; Central Bank of Nicaragua, president’s interview note, 29 October 2026; S&P Global Ratings, rating scale definitions; US Treasury OFAC, Nicaragua-related sanctions program; USTR notice of implementation, 29 December 2025; USTR notice of actions, 28 July 2026; US State Department, Nicaragua travel advisory.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief