After the fiscal and financial debacle that was thought to explode from the mid-1990s and the events of 1998 and 1999, the temporary suspension of banking operations, resulting in the takeover and closure of twenty banking entities, Ecuador managed to take a breath and a breath with dollarization by decree January 9, 2000

Panama, since its independence, in 1904, had a currency called “balboa” with only a fractional issue, and the actual circulation of US dollars, and El Salvador already in the 21st century approved bimonetarism, the dollar and the Salvadoran colón, which actually remained to be issued .

The election on August 20, 2023, in the event of a second round of presidential elections, should produce a government for just over 18 months, from November 2023 to May 23, 2025. However, there are announcements that the consultation would be formulated to decide on convening the Constituent Assembly, in order to modify the current structure of government, produce vacant leaders of control bodies and other entities and appoint their replacement leaders or managers, and amnesty the “politically persecuted”, except that due to the assumed obligations, they will pass a new Constitution and specific laws according to to the will of the ruler and his retinue. In that case, there will most likely be a change in the presidential mandate, as Rafael Correa did with the Assembly and the Montecristi Constitution (2007-2008).

Due to the very serious problems of the fiscal box, with the decrease in income and significant delays in transfers and outstanding payments, and with the decrease in foreign exchange balances due to the decrease in the volume and prices of exports and due to imports that were not assumed in previous years, these would be additional costs that would , since they had priority for the execution of political decisions.

Own currency is subject to monetary problems with the appearance of “now yes

The campaigns do not specifically mention dollarization, the main support of which must be the correct management of public finances, consumption, borrowing and investments. Before the election process, some actors referred to the supposed need to restore sovereign monetary management, that is, to have their own currency, as was the sucre in Ecuador before 2000.

In Argentina in 1991, there was not dollarization but convertibility to stop the hyperinflation that was suffocating that country, with the convertibility of one dollar equal to one peso, with the support of a reserve that was established. Poor economic management destroyed the convertibility, which was abolished in January 2002. Inflation in Argentina in June 2023 was over 142%, on an annual basis, and the exchange rate exceeded 480 pesos to the dollar on average.

The country’s own currency is sensitive to monetary issues that favor the expansion of public spending, with the illusion that “there is money now” even though its consequences in the coming weeks will be devaluation and inflation.

Should candidates decide how to maintain dollarization or should they move to a “sovereign” currency? (OR)