There are several Latin American countries that have officially or de facto turned to the dollar, and one of those that has served as inspiration for the proposals of the elected president of Argentina, Javier Milei, is Ecuador.
The dollarization proposed by Milei in Argentina has its antecedents in Ecuador
On the radar of the far-right and liberal, Milei, is applying a dollarization process similar to the Ecuadorian one, in which the US currency is the official currency of the country to buy and sell products and services.
But unlike what happens in Ecuador, Milei proposes a complete elimination of the so-called Central Bank , an entity in charge of issuing the official currency.
According to Milei, without Argentine pesos in circulation, there would be no need to have a Central Bank.
“ Yes, we are going to dollarize the economy. We are going to close the Central Bank. “We are going to end the cancer of inflation,” said Milei, in the debate for the second round and before winning the Presidency.
For Milei, dollarization would reduce the phenomenon of hyperinflation that afflicts Argentina and would make the country more competitive.
On several occasions, the elected president has mentioned the so-called economic and financial ‘stability’ of Ecuador , which is not subject to the fluctuations of inflation since it adopted the dollar in March 2000.
But the currency exchange process in Ecuador was not without controversy, since it was carried out after a deep banking crisis that brought losses of USD 5,000 million and left thousands of people bankrupt.
Operationally, the change from the sucre to the dollar came after a bank holiday added to a temporary freeze of 50% of deposits , in a context of financial crisis.
Panama is another country in the region where the dollar circulates, but also on par with the balboa, the local currency. The North American bill has been used since 1904 , shortly after the country became independent from Colombia and approached the United States with the construction of the Panama Canal, under Panamanian control only since 1999.
