With the rule of law (and the sucre) in shambles, President Jamil Mahuad announced on January 9, 2000 that Ecuador would abandon the sucre and officially dollarise
Some traders have shifted to US dollar as the preferred medium of exchange and better store of monetary value, first sign that our economy is about to dollarise
It plans to dollarise
an additional $1 billion during 2015/16 to save another Rs 360 crore.
The decision to officially dollarise
(or euroise) an economy is of a level of importance not easily matched by other economic policy decisions.
Eichengreen, Barry (2000b), "When to dollarise
," Journal of Money, Credit and Banking, forthcoming.
Commenting on this development, Mr Ashutosh Agarwala, CFO & Director (Finance), Essar Steel India, said, We are continuing with our strategy to dollarise
our balance sheet, bring down interest cost and elongate maturity of our debt in line with our peers.
7) An immediate and apparently simple solution would be to get rid of the domestic currency and dollarise
Eichengreen, Barry, (2000), "When to dollarise
," Journal of Money Credit and Banking, forthcoming.
The one brief brush with full, official dollarisation occurred in 1983: a proposal by the then Finance Minister Yoram Aridor was immediately deemed completely unacceptable by popular acclaim and Aridor resigned the very same day that he made a formal proposal to dollarise
We propose that while currency substitution and asset substitution are crucial alternative explanations for the motivation of agents to dollarise
, they are not visible forms of the phenomenon.
When network externalities become sufficiently large, countries may decide to dollarise
or euroise their economies, forgoing the seigniorage, and the flexibility of domestic monetary management in exchange for greater financial stability and an enhanced ability to attract foreign investment.
The discussions on possible options for monetary unification, however, have been revived by the decisions recently taken by El Salvador to officially dollarise
its economy and by Guatemala to legalise the use of the dollar alongside the quetzal (see below).