El Salvador to Stay Dollarized

Salvadoran President Mauricio Funes has rejected assertions of Vice President Salvador Sanchez about the need to return to a national currency.

Thursday, May 31, 2012

President Mauricio Funes said he will not reverse the dollarization of the Salvadoran economy.

Funes, who acknowledged that dollarization implemented in the country has created advantages and disadvantages, said that to reverse the process started in 2011 "would create uncertainty", according to Elsalvador.com.

In public statements, Vice President Salvador Sanchez Ceren, blamed dollarization for the current economic crisis and said it must be reversed to return to the colón.

Funes said he would not reverse any privatizations pushed by previous administrations nor would he start new processes.

More on this topic

Salvadoran Economy Will Remain Dollarized

April 2010

This was stated by Carlos Acevedo, president of the Central Bank, in response to a proposal to return to the Salvadoran colón.

Acevedo added that President Mauricio Funes committed to keeping the country dollarized in his presidential campaign, reaffirming it many times afterwards.

Why It Would Be Impossible to de-Dollarize El Salvador

June 2012

An Argentine expert predicts that if the Salvadoran economy abandons the dollar it would trigger serious social upheaval ... and Argentines know all about that...

An article in Elsalvador.com by Eduardo Levy Yeyati, former official of the International Monetary Fund (IMF) and the World Bank, and "who has conducted research on the causes and consequences of dollarization, the behavior of markets in times of crisis and of monetary and exchange rate regimes, said a freeze on bank withdrawals in the country would be accompanied by a pronounced economic downturn, which would be associated with an imbalance in the payment system, ie, lack of liquidity. "

Yes to Dollarization, No to Dollarization

April 2010

In El Salvador, the debate over the advantages and disadvantages of dollarization has been reignited, as the government is in need of resources for funding its programs.

President Funes has regretted that Dollarization has limited El Salvador from taking actions to combat the economic crisis.

Nobody Wants to Dollarize In Guatemala

June 2010

In a strange unanimity, government officials agree with independent economic analysts: dollarization is inconvenient for Guatemala.

That the Guatemalan Central Bank argues against dollarization is no surprise for anyone, as its very reason for existence is questioned with it.

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