On Thursday, January 9, 2000 marks 20 years of dollarization in Ecuador. But what did the change in this monetary system imply? Here are some facts:
- To determine that a dollar cost 25,000 sucres, it was necessary to do a thorough job applying formulas that legally and technically could. Without this work on January 10, 2000, the resulting exchange rate would have been 32,411 sucres , according to a study entitled “How was Ecuadorian dollarization done in practice?”, Written in 2017 by Miguel Dávila Castillo.
- The decision to coin their own fractional coins was due exclusively to a cost analysis. For example, acquiring a currency of 25 cents in the United States has, of course, a cost of 25 cents, but putting it in Ecuador increases costs substantially, both for its weight and for the space it occupies in transportation. That is why there are 5 cents, 25 cents and 50 Ecuadorian cents that are valid in the domestic market, not in the world. Hence, foreigners visiting the country must separate Ecuadorian fractional currencies and exchange them before returning to their country of origin.
To read the full article on Ecuador Times, click here.