The World - News from Sept. 1, 1988

Nicaraguan President Daniel Ortega, in an effort to shore up an economy he said has been damaged by U.S. support for the Contras, announced new measures that officials say include a devaluation in the nation’s currency by 120% and a wage hike for government workers of as much as 140% to help offset what economists say is 4000% inflation. Ortega, in a speech to the Cabinet, also urged Nicaraguans to implement a “survival economy.” The devaluation of the cordoba, the nation’s currency, was the fourth since February and reduces it from 80 cordobas per U.S. dollar, at the official exchange rate, to 180 per dollar. Ortega blamed the war against the anti-Sandinista rebels for the economic woes. At least 40% of Nicaragua’s budget goes to defense expenditures, according to officials.