Ecuador’s President Daniel Noboa has issued a decree reaffirming the US dollar as the only official currency, amid election tensions and political debate on alternative currencies. Noboa seeks constitutional reforms for greater control over monetary policy in response to opposition challenges, particularly from leftist candidate Luisa González, while critics question the necessity of the decree given existing laws on dollarisation. The US dollar has been pivotal for Ecuadorian monetary stability since 2000, despite economic fluctuations.
Ecuador’s President Daniel Noboa has reinforced the status of the US dollar by issuing Executive Decree No. 565, which confirms it as the exclusive official payment method. The decree comes amidst rising tensions from an upcoming presidential election and political discourse surrounding alternative currencies, as reported by El Universo.
This decree, published on March 18 in Cuenca, explicitly states that the US dollar is the sole monetary unit in Ecuador. Noboa has urged his National Democratic Alliance (ADN) party to initiate a constitutional reform to Article 303, seeking to centralize monetary policy control within the Executive Branch through the Central Bank.
In a conversation with Radio W, Noboa expressed that the decree intends to fortify dollarisation against opposition proposals, asserting criticism against former President Rafael Correa’s movement for alternative monetary systems. He aimed to clarify concerns over discussions about local alternatives or modifications to the dollar-based economy.
As the April 13 presidential runoff approaches, Noboa faces leftist candidate Luisa González from Correa’s Citizen Revolution movement, who is accused by critics of proposing a shift from the dollar. The suggested constitutional reform mandates all financial transactions must be executed in US dollars, while forbidding the Central Bank from issuing alternative currencies or financing public sector ventures.
The decree was perceived as a reaction to leftist assemblywoman Paola Cabezas’ claims that an Ecuadorian-style dollarisation is necessary, proposing a change to the established dollar system. González has firmly rejected these ideas, clarifying that her party does not seek to abandon the dollar.
Critics like Mateo Villalba, former central bank manager, have labeled the decree as politically driven and elaborate, given dollarisation is already legally established in Ecuador. Villalba suggests that this move is aimed at bolstering Noboa’s support prior to the significant runoff election.
Ecuador adopted the US dollar in 2000 due to a severe financial crisis characterized by extreme inflation and bank failures. Since then, the dollarisation policy has been credited with providing monetary stability, despite facing various economic challenges over the years, such as fluctuating oil prices and the global financial crisis.
In summary, President Noboa has issued a decree reinforcing the US dollar as Ecuador’s only legal currency, responding to political calls for alternatives ahead of a close election. This initiative also signals a strategy to unify monetary control under the executive, aiming to ensure financial stability amid uncertainties about the dollar’s future in Ecuador. Overall, dollarisation has remained crucial for Ecuador’s economic stability since its adoption in 2000.
Original Source: www.intellinews.com
