Nicaragua Central Bank Head Quits Amid Row

Nicaragua’s Central Bank President Antenor Rosales quit amid differences with President Daniel Ortega over plans to use central bank reserves for the creation of a regional bank for a Venezuelan-led bloc of Latin American nations, known as Alba.

Ortega has proposed that Finance Minister Alberto Guevara replace Rosales as head of the central bank, said Edwin Castro, the chief legislator for the ruling Sandinista party, in a statement on a government website today. Castro said the appointment must be approved by lawmakers and didn’t say whether Guevara would continue at the Finance Ministry.

Castro said Rosales’s resignation was “normal government procedure” and not a result of the disagreement with Ortega.

In a Feb. 4 meeting of Alba leaders in Caracas, Ortega agreed to put 1 percent of Nicaragua’s international reserves, or about $17 million, toward the Alba bank, according to a statement on a government website. Rosales told reporters in Managua on Feb. 6 that “no one can touch the international reserves of Nicaragua.”

“The resignation of Rosales sends a bad message to the people of Nicaragua,” opposition legislator Wilfredo Navarro said in comments at the National Assembly broadcast on TV Channel 100% Noticias. “He was defending the legality of the country’s central bank institution. Withdrawing funds for an unknown bank is a violation of the institution.”

Venezuela is willing to transfer 1 percent of its reserves, or about $300 million dollars, to a bank controlled by the Alba bloc, Venezuelan President Hugo Chavez said on state television Feb. 4. The Alba members include Venezuela, Cuba, Nicaragua, Ecuador and Bolivia.

Chavez, who says he wants to eliminate the “dictatorship” of the U.S. dollar, has promoted the expanded use of the sucre, a virtual currency created by the Alba bloc in 2009, for regional trade.

To contact the reporters on this story: Adam Williams in San Jose at awilliams111@bloomberg.net Blake Schmidt in Bogota at bschmidt16@bloomberg.net

To contact the editor responsible for this story: Philip Sanders at psanders@bloomberg.net

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