Friday, December 12, 2008

El Salvador to abandon dollar?

For years, significant majorities of Salvadorans have believed that the switch from the Salvadoran colón to the US dollar as the country's national currency caused prices to rise and was otherwise bad for the economy. The FMLN opposed dollarization from the start, although Mauricio Funes has said that he would not return to the colón. Figuring out the net impact of dollarization is frankly not an easy task.

Now it is possible that El Salvador may be on a path to abandon the dollar, but not to return to the colón. Last week presidents of Central American countries met and agreed to combat the current global financial crisis through regional integration including the adoption of a common currency and common passport.

3 comments:

Politics and the Future said...

Why should they switch?

El Salvador need to remain independent

when will this take place if it does?

fencesitter said...

My question is why switch back or to some other currency once the painful part is past? The whole issue of having to pay the money changers is where it will hurt those that can least afford it. Having to pay to have money transfered from the north hurts enough and then having an additional surcharge for the change in currency will just hurt all the more.

El-Visitador said...

He he.

As if Central American Presidents hadn't met, oh, just about every six months for the last 15 years and every time stated that they were working towards de-bureaucratized borders and common passports.

And it is not as if their predecessors didn't just about say the same thing at least once a decade since 1840.

Come on!