HNL - Honduran Lempira

Overview of the Honduran Lempira

Lempira is the official currency in Honduras. The name Lempira is named after the leader Lempira - a Lenca indigenous chief who led the indigenous resistance against the Spanish army. His image also appears on the 1 lempira banknote and the 20 and 50 centavos coins.

Nowadays, the Lempira is issued and managed by the Central Bank of Honduras with various denominations and is widely used in daily transactions. The central bank will be responsible for maintaining the stability of the currency and controlling inflation at the lowest levels, stabilizing prices and the national economy.

History of the Honduran Lempira

The Honduran Lempira was officially introduced in 1931, replacing the peso at a one-to-one exchange rate. At the end of the 1980s, the exchange rate was pegged to the US dollar at 2 Lempira = 1 US dollar (the 20 centavo coin was called daime because its value was equivalent to the US dime). 

As of April 4, 2022, the lempira was listed at an exchange rate of 24.40 HNL to 1 US dollar.

The Honduran Lempira was designed with the purpose of stabilizing the economy of Honduras and is issued in two forms: banknotes and coins. This currency has also undergone several redesigns reflecting changes in the form of currency as well as the economic condition of Honduras.

The Honduran Lempira Denominations

The Honduran Lempira is currently in circulation with coins and banknotes of the following denominations:

• Bank notes: L1, L2, L5, L10, L20, L50, L100, L200, L500

• Coins: 5, 10, 20, 50 centavos

Coins

• In 1931: Coins were introduced with denominations such as 5, 20 & 50 centavos and 1 lempira.

• In 1935, 1939, and 1932, 1, 2, and 10 centavos coins were respectively added.

• In 1937, the silver 1 lempira coin was discontinued.

• In 1998 and 1974, the 1 and 2 centavos coins, along with other silver coins, were replaced by nickel in 1967.

• The legal denominations of coins include 1, 2, 5, 10, 20, and 50 centavos. As of 2024, coins are rarely used for payments, with paper money being the primary form of currency.

Banknotes

• In 1932, the Bank of Honduras and Banco Atlantida issued the Lempira Honduras banknotes with denominations of 1, 2, 5, 10, and 20 lempira. 

• In 1950, the Bank introduced the 50 and 100 lempira notes, followed by the introduction of the 500 lempira note in 1995.

• In January 2010, a new 20 lempira note made of polymer was issued, with 60 million notes released.

• To commemorate the 200th anniversary of Honduras' independence, the Bank issued a new 200 lempira bill featuring two bright red macaws, the national bird of Honduras.

The Honduran Lempira exchange rate

The Honduran Lempira is currently subject to a regulated floating exchange rate policy by the Central Bank of Honduras. The policy objectives are to control inflation, promote economic growth, and ensure the stability of foreign exchange reserves.

History of the Honduran Lempira exchange rate

• In 1931: The Lempira was issued to replace the Honduran peso at an exchange rate of 1 lempira = 1 peso.

• Period 1931 - 1980: The exchange rate of the Lempira was maintained steadily with little fluctuation.

• At the end of 1980: Honduras faced economic difficulties, with rising inflation affecting the exchange rate of the lempira.

• In 1990: To maintain economic stability, the government implemented measures to adjust the exchange rate and monetary policy.

• In 1998: Honduras joined the exchange rate adjustment plan to control inflation and stabilize the economy.

• In 2009: Political crisis increases exchange rate volatility

• From 2010 to 2020: The exchange rate of the Honduran lempira showed a more stable trend thanks to improved monetary and economic policies.

• From 2020 to now: The Honduran Lempira continues to face global and domestic economic challenges. The government and the central bank continue to maintain a stable exchange rate and effectively regulate the value of the currency.

• rent exchange rate regime: Despite the fluctuations of the RMB and the Chinese financial market raising concerns about the possibility of HKD being unpegged from USD, the Hong Kong Monetary Authority (HKMA) still asserts that it will defend the current USD-linked exchange rate regime.

Factors affecting Honduran Lempira exchange rate

Several factors influence the exchange rate of the Honduran Lempira (HNL). Key among them are inflation rates, which can erode purchasing power and lead to depreciation if higher than those of trading partners. Economic stability, characterized by consistent GDP growth and low unemployment, also plays a crucial role in attracting foreign investment, thereby strengthening the Lempira. Additionally, the balance of trade impacts exchange rates; a trade deficit may lead to a weaker currency. Lastly, political stability and government policies, including monetary policies set by the Central Bank of Honduras, significantly affect investor confidence and the overall value of the Lempira on the foreign exchange market.

In general, the value of the Honduran Lempira is influenced by national and global economic and political factors. To get the most accurate real-time exchange rate for this currency, visit Gocuco to keep track!