Ecuador’s President Daniel Noboa has reaffirmed the US dollar as the exclusive currency through Executive Decree No. 565 amid election tensions. The decree aims to strengthen dollarisation and respond to alternative proposals from political opponents, particularly before the April presidential runoff. Criticism exists regarding the necessity of the decree, as dollarisation is already enshrined in law.
Ecuador’s President Daniel Noboa has reaffirmed the US dollar as the exclusive currency of the nation through Executive Decree No. 565, published on March 18. This decree was issued amid rising election tensions and aims to address concerns regarding potential alternatives to the dollarized economy, as reported by El Universo.
The decree explicitly states that the “United States dollar [is] the monetary unit and sole official means of payment in the Republic of Ecuador.” Noboa’s National Democratic Alliance (ADN) party is advocating for a constitutional amendment to Article 303, which would centralize monetary policy under the Executive Branch via the Central Bank.
In a recent interview with Radio W, Noboa articulated that the decree’s intent is to “strengthen dollarisation” in light of opposing proposals, particularly focusing on exiled former president Rafael Correa’s push for alternatives like an Ecuadorian currency. The timing of the decree is significant as it precedes the presidential runoff on April 13, pitting Noboa against leftist candidate Luisa González, who has been linked to Correa’s Citizen Revolution movement.
The suggested constitutional amendment would compel all financial transactions in Ecuador to be conducted in US dollars while explicitly barring the Central Bank from issuing any currency other than the dollar. This move seeks to ensure the integrity of the dollarized system amid various political critiques.
Criticism of the decree has emerged from assemblywoman Paola Cabezas, who insinuated a need for an “Ecuadorian-style” dollarisation model. In contrast, González has sought to clarify her stance, asserting a commitment to maintaining the dollar as the official currency and distancing her party from the ongoing discussions.
Expert commentary from Mateo Villalba, former manager of Ecuador’s central bank, expressed skepticism regarding the necessity of the decree, which he deems politically motivated rather than legally required, as dollarisation is already established within the Organic Monetary and Financial Code.
Ecuador officially adopted the US dollar in 2000 to address a severe financial crisis characterized by hyperinflation and bank failures. Historical data from Ecuador’s central bank indicates that this dollarisation has successfully provided monetary stability despite various external shocks, including fluctuations in oil prices and global economic downturns.
In summary, President Noboa’s Executive Decree No. 565 reaffirms dollarisation in Ecuador as a strategic response to political opposition amid election tensions. The constitutional reform proposal aims to centralize monetary policy, ensuring all transactions remain in US dollars. Critics view the decree as unnecessary and politically motivated, with ongoing discussions highlighting the political divides shaping Ecuador’s economic future. The current context underscores the vital role of dollarisation in maintaining monetary stability since its adoption in 2000.
Original Source: www.intellinews.com
