The U.s. Dollar Was Adopted By El Salvador Essay

811 Words Dec 7th, 2016 4 Pages
When the U.S. dollar was adopted by El Salvador, it seemed as it would’ve been an excellent idea. With El Salvador’s economy already being closely tied to the United States, they assumed it would be better for El Salvador to switch through Dollarization. The U.S. dollar was going to be used to battle the nation’s inflation as well as increase economic growth. After about six years, it became clear that the dollar was not helping El Salvador’s economy the way it should have.
At first, I believed that switching to the dollar would be a great choice for El Salvador. More freedom and purchasing power were sure to come when they switched, but as I researched more about it, I realized that it could’ve been a mistake. In an article I had read it seems that inflation is still a common problem in El Salvador as well as other Latin American nations that have adopted the U.S. Currency. One of the vendors in San Salvador, the nation’s capital, is still having problems with the inflation. She said that she and her customers have to save as much as possible just to make ends meet at the end of the month (Dickerson). In theory, the U.S. dollar was meant to give the people of El Salvador better interest rates, stabilize the economy, and lower inflation. El Salvador’s exports also became more expensive when they switched.
Other countries who made the switch are having problems as well. Ecuador adopted the dollar when their own currency, the Sucre, bottomed out. Ecuador’s hyperinflation was…

Related Documents