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Twenty years of official dollarization in Ecuador: a blessing or a curse?

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  • Selin ÖZYURT
  • Simon CUEVA (TNK Economics)

Abstract

Ecuador adopted the U.S. dollar as its legal tender in January 2000, in a context of deep economic and political crisis. Almost two decades later in December 2019, the Executive Board of the International Monetary Fund (IMF) approved a total disbursement of US$498 million after the completion of the second and third reviews under the Extended Fund Facility Arrangement. The financial agreement with the IMF had been concluded in March 2019, under the presidency of Lenin Moreno, in order to address the country’s growing external financing needs. Within the framework of the macroeconomic program supported by the IMF, Ecuadorian authorities committed to ensure fiscal sustainability, re-build the international reserves of the Central Bank of Ecuador (BCE), and strengthen the institutional foundations of official dollarization.

Suggested Citation

  • Selin ÖZYURT & Simon CUEVA (TNK Economics), 2020. "Twenty years of official dollarization in Ecuador: a blessing or a curse?," Working Paper 19795ea3-88a3-4f85-af90-a, Agence française de développement.
    • Handle: RePEc:avg:wpaper:en11316
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    References listed on IDEAS

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    1. International Monetary Fund, 2019. "Honduras: Staff Report for the 2019 Article IV Consultation and Request for a Stand-By Arrangement and an Arrangement Under the Standby Credit Facility-Press Release; Staff Report; and Statement by th," IMF Staff Country Reports 2019/236, International Monetary Fund.
    2. Rose, Andrew K & Engel, Charles, 2002. "Currency Unions and International Integration," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 34(4), pages 1067-1089, November.
    3. Fischer, Stanley, 1982. "Seigniorage and the Case for a National Money," Journal of Political Economy, University of Chicago Press, vol. 90(2), pages 295-313, April.
    4. Thorsten Beck & Asli Demirgüç-Kunt & Ross Levine, 2007. "Finance, inequality and the poor," Journal of Economic Growth, Springer, vol. 12(1), pages 27-49, March.
    5. Mr. Luis Ignacio Jácome, 2004. "The Late 1990's Financial Crisis in Ecuador: Institutional Weaknesses, Fiscal Rigidities, and Financial Dollarization At Work," IMF Working Papers 2004/012, International Monetary Fund.
    6. Kose, M. Ayhan, 2002. "Explaining business cycles in small open economies: 'How much do world prices matter?'," Journal of International Economics, Elsevier, vol. 56(2), pages 299-327, March.
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    Cited by:

    1. Rapetti, Martin & Palazzo, Gabriel & Waldman, Joaquin, 2023. "Planes de estabilización: Evidencia de América Latina [Stabilization plans: Evidence from Latin America]," MPRA Paper 118910, University Library of Munich, Germany.

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    JEL classification:

    • E - Macroeconomics and Monetary Economics

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