After Nicaragua´s revolution on the 70´s and Iran contra affair in the 80´s lots of Nicaraguan left the country and moved to work and live in places as US and Costa Rica and lately Europe so that´s why the amount of remittance coming back to the country is such a big amount of money that banks have to do agreements with people (money changer) to stay close to the banks and next to the markets in order to exchange Dollars into Cordobas and keep lines on the banks shorts so changing your money with this fellows is ok, but always look for them close to the banks or next to the market area, all of them are associated so look for the ones that have and ID hanging from their necks, also in places as Granada you will find regular shops or stores with a small sigh outside “Cambiamos dolares” “we exchange dollars” which is also another safe area to exchange your dollars for a good rate sometimes as well as on the banks and much faster and without showing your passport.
Now, if you bring dollars the worst place to exchange them will be at the booth inside of the airport they have the worst rate all around the country so it will be recommend it to wait and use small dollars to tip get first meals and arrange transportation as this always will be in dollars.
If you decide not to exchange any dollars remember that bars, restaurants and shops normally charge in local currency “Cordobas” so they will give you any rate they believe is convenient for them and your change back most of the time will be in Cordobas, remember that they are not banks.
Dollars is the best currency to bring, as Euros or Sterlings and now a day travelers check are very hard to exchange but all the dollars that you bring be sure that they have to be Clean, no marks, tears, nicks, crisp new bills and bills with the series CB-B2 year 2001 will not be accepted for exchange or really hard to exchange. Also be aware that $100 and $50 bills are often not accepted on restaurants, bars and stores but they will be accepted by banks and money changers but just to exchange them into Cordobas.
The ATMs in Nicaragua will give you an option to withdraw in Cordobas or Dollars as well as Spanish or English. And keep in mind that by using Cordobas you always going to have the real price for what you are paying.
But always keep dollars with you as all of the hotels, tours and souvenir will be charge in US currency and many will give you a discount if you pay in cash.
Now a day 10/21/2012 the exchange rate is 23.90 Cordobas for 1 US$ Dollar.
PD. because the Top questions about Nicaragua is disable by the moment i let you this on the forum as soon as top question is back i will publish it there.