Nicaragua devalued its currency by 54%, the...

Nicaragua devalued its currency by 54%, the seventh drastic adjustment in a year, and cut subsidies on transportation to combat an economic slump and soaring inflation. The official exchange rate of the cordoba against the dollar has been set at 2,000 to 1. The government cut the subsidies as part of a plan to avoid printing money to cover a widening budget deficit. President Daniel Ortega has announced major budget cuts for 1989, including a 29% cut in military spending. Prices rose 21.742% in 1988, according to Ortega.