If you are entering Nicaragua by land, get rid of your Honduran lempiras and Costa Rican colones, as they are difficult to exchange far from the border.
The national currency is called córdoba oro (NIO, locally abbreviated C$), also known locally as peso, simply “cordoba” or vara(s), among other terms. Peace Corps volunteers and expatriates sometimes say “cordoba”, but Nicaraguans do not use this word.
As of September 2016, there are 28.9 córdoba oro for one US dollar. The currency loses about 5% of its value against the US dollar every year, which could be described as a sliding parity with built-in inflation. The córdoba therefore tracks and follows the movements of the US dollar in its exchange rates against other currencies.
Most places accept US dollars (although sometimes at less than face value), but you will often get change in Córdoba Oro. Córdoba oro is essential to pay for bus tickets, taxis, small meals and other everyday purchases. Try to carry about 500 córdoba oro in small denominations with you at all times. Almost all banks exchange USD for NIO, but the queues are often long and you may have to use your credit card instead of your debit card to get money. Be sure to bring your passport when you change money. All ATMs dispense local currency and most can also dispense US dollars. Make sure the ATM you use belongs to one of the networks listed on the back of your bank card. While you can find ATMs that work with the MasterCard/Cirrus system, most only use the Visa/Plus system. In many cases, an ATM is located in its own air-conditioned (read: freezing cold) mini-room with a door you can close. You should prefer these ATMs to others because the door is usually opaque and protects your data from prying eyes. It can sometimes be difficult to get change for both a 500 Cordoba note and a 20 USD note. 100 and 50 USD notes are often not accepted, except by banks. Therefore, if you are coming from the USA (or another country that uses the dollar), it is advisable to carry most of your money in 20 USD notes, as well as plenty of 5 USD and 1 USD notes (for places that quote the price in USD but claim not to have small USD notes to change).
Euros (banknotes only) are only exchanged in banks and the exchange rate is much worse than what you would get when exchanging US dollars. If you are from a European country, the easiest way is to make sure you have a bank account that allows you to withdraw money in Nicaragua at little or no cost.
If you need to exchange money when the banks are closed, or if you want to exchange money that the bank does not change, there are private money changers known as “cambistas” or “coyotes”. While most of them are honest and belong to cooperatives that keep them honest, there are dishonest money changers who try to pass off 1980 cordobas as real currency or cheat you. Pay attention to the exchange rate, do your own calculations (calculators have been known to be manipulated) to check their accuracy, and only hand over your money after you have had a good look at the change you will receive. Money changers can be found at most border crossings and also in Managua. During bank opening hours they often offer better rates and shorter waiting times, but it’s up to you whether you think it’s worth it. To minimise the risk, try to get your money in small notes, which also makes it easier to get change.
Most modern shops, including Texaco (Star Mart), Esso (On The Run), La Union (supermarket owned by Wal-Mart) accept US currency, often at a slightly better exchange rate than banks or “cambistas” on the streets (watch the cambistas’ IDs), with change in NIO. Limit the notes to 20 USD for more success. Cambistas have no problem with 50 and 100 USD notes. They do not accept Euros, Canadian money or travellers cheques. There is an exchange office at the airport, but the rates are – as usual – terrible and it is better to find an ATM in the airport (there should be several) and withdraw Cordobas there.
American and international credit cards are accepted in large retail chains (Palí, La Colonia, La Unión). Many hotels also accept credit cards, but especially in remote areas you often have to pay a surcharge of 4-6% if you pay your bills with a credit card.
If you have to bring one thing from Nicaragua, it’s a hammock. Nicaraguan hammocks are some of the best made and most comfortable available. The best of them are made in Masaya. Ask a taxi to take you to the fabrica de hamacas, the mercado viejo or the mercado nuevo. You will find the largest selection and the best prices in Masaya. A single hammock for one person should cost less than 20 USD. Hammocks are also sold at the Huembes de Managua market, which has the only large section for local products and handicrafts in Managua.
Nicaragua also produces an excellent, award-winning rum called Flor de Caña. It is the most widely drunk liquor in Nicaragua. The 5 year old (prefer Extra Light to Extra Dry or Etiqueta Negra) and especially the 7 year old (Gran Reserva) rums are excellent value for money – around USD 4-6 per bottle. Buy from local shops, as prices are higher in airport duty-free shops. Gran Reserva is the best value for money.
A trip to the art towns of the “Pueblos Blancos” is the most rewarding way to shop for local handicrafts. The best and easiest place for tourists to buy handicrafts is the handicraft market in Masaya. There is a similar market with the same products (from the same vendors) at the Mercado Huembes in Managua, which has slightly higher prices than the market in Masaya. These towns are only 10 minutes from Masaya, 30 minutes from Granada and 40 minutes from Managua and are the centre of Nicaraguan handicrafts. Catarina is home to dozens of nurseries offering the wide variety of plants that this lush tropical land can produce, and also offers magnificent views of Laguna de Apoyo (volcanic crater lake), which you can admire from many restaurants. San Juan del Oriente is the centre of pottery production. Here you can find dozens of studios and family-run shops where you can meet artisans and choose from a dazzling and creative range of vases, bowls and other ceramic items. Some of the best shops with more original designs are located just a few blocks from town, off the main street. Finally, Masatepe is known for its furniture, especially made of wicker and wood, and especially for its rocking chairs, the favourite chair of Nicaraguans. You may not be able to take rocking chairs or ferns on the plane, but window shopping in these quaint towns is well worth it. You can also find pottery from San Juan del Oriente, furniture from Masatepe and other handicrafts in Masaya, at the Mercado Huembes in Managua and in the streets of Granada, Leon and other places frequented by tourists. Don’t forget to haggle. Even if you are a tourist, you can haggle.
Shopping by western standards in Managua is mainly done in shopping centres, the largest and most modern being MetroCentro near the Ruben Dario Rotonda. There are smaller, less high-end shopping centres in Plaza Inter and Bello Horizonte in Plaza Las Americas. A new and large shopping centre called Plaza Santo Domingo is located on the Carretera Masaya, at about kilometre 6.
Shopping like the locals is done in the mercados, the public markets. The largest (and arguably one of the largest in the Americas) is the Mercado Oriental in Managua. This market contains everything in individual shops or stalls, from food to clothes to home electronics. The Mercado Oriental is one of the most dangerous places for tourists in the city. If you go there, take only the cash you want to spend. No purses, watches or jewellery and if you take a mobile phone, put it in your pocket out of sight of others. It is best to go with a local or even better with a group of locals.
Less scary, safer and with a similar selection is the Mercado Huembes. It is smaller and more open (it is less difficult to get caught in a dark, secluded aisle). This market offers the Masaya handicrafts already mentioned at higher prices than in Masaya. There are a few other similar markets that are smaller, further off the beaten track and not worth going to as they are not safe and offer fewer goods at higher prices.
The small balsa wood figures you can buy in many places are made in the Solentiname Islands, where you can watch them being made and where you can probably also get a custom-made one. Many of the inhabitants of the Solentiname archipelago also paint and some sell their paintings directly from their homes or in the markets of Managua, Masaya and other larger cities.