Honduran Lempira

Overview

The Lempira is the official currency of Honduras, a Spanish-speaking country in Central America. The country is bordered to the west by Guatemala, to the southwest by El Salvador, to the southeast by Nicaragua, to the south by the Pacific Ocean, and to the north by the Gulf of Honduras, a large inlet of the Caribbean Sea. Honduras also controls the Bay Islands located in this Gulf.

The Honduran Lempira is named after a national hero from the 16th century. Lempira was ruler of the Lenca tribe, and led an unsuccessful local native resistance against the Spanish conquistador forces. He is honored on both the 1 lempira note and the 20 and 50 cent coins.

The Lempira is generally the only currency accepted in Honduras, although the US Dollar is widely accepted on the touristed Bay Islands, and businesses near main tourist resorts.

Economy

• The Honduran economy has continued to grow slowly, but the distribution of wealth remains very polarized and average wages are low for the average Honduran.
• Economic growth in recent years has averaged 7% a year, one of the highest rates in Latin America, but 50% of the population, approximately 3.7 million people, remains below the poverty line. It is estimated that over 1.2 million people are unemployed, with the unemployment rate standing at 27.9%.
• The United Nations Human Development Index (HDI), which ranks countries based on three human development categories (life expectancy at birth, years of schooling, income per capita), shows Honduras has a medium human development index, and has the fourth lowest HDI in the Americas according to its 2011 estimate.
• Honduras was made eligible for debt relief in 2005, thanks to the IMF and World Bank’s Heavily Indebted Poor Countries (HIPC) Initiative.

History

• The Honduran Lempira was introduced in 1931, replacing the Honduran Peso (which had in turn replaced the Honduran Real in 1862).
• In 1931, coins were introduced in denominations of 5, 20 and 50 centavos, and 1 lempira. 1, 2 and 10 centavo coins were added in 1935, 1939 and 1932 respectively.
• The Bank of Honduras issued the first banknotes in 1932, in denominations of 1, 2, 5, 10 and 20 Honduran Lempira.
• Silver 1 lempira coins ceased being minted in 1937, and other silver coins (20 and 50 centavos) became cupro-nickel in 1967.
• The Central Bank of Honduras took over the production of paper money in 1950, introducing 50 Honduran Lempira notes in 1951. In 1975, banknotes of 100 Honduran Lempira were added, followed by 500 Honduran Lempira in 1995.