According to provision 19 of the article 148 of the Constitution of 1950 the Central Bank of Nicaragua was created by Legislative Decree No. 525 of September 16, 1960. Its operation began on January 1, 1961, as a institution with functional autonomy, indefinite duration, own capital and legal personality.

The current Political Constitution of Nicaragua in its article 99 states: "The Central Bank is the state entity in charge of the regulation of the monetary system." Nowadays, the BCN is governed by Law No. 732 "Organic Law of the Central Bank of Nicaragua", published in La Gaceta, Diario Oficial No. 148 and 149, dated August 5 and 6, 2010 respectively. This Law defines the BCN: "..as a state decentralized entity of technical nature, indefinite duration, legal personality, own capital and full legal capacity." Its domicile is the city of Managua and it may establish branches and agencies in other places within the country.

The main objective of the Central Bank of Nicaragua is the stability of the domestic currency and the normal development of internal and external payments.