SAN SALVADOR, El Salvador (AP) -- The government is considering
"dollarizing" its economy, Economy Minister Jose Luis Trigueros said
Thursday, though he added that it's not rushing toward the greenback.
"The government is going to take any measure necessary to maintain this
power of acquisition (of the national currency), and one of the alternatives
that has always existed is dollarization," he said in an interview with a local
That comment appeared to revive a debate began several years ago which
had been quiet recently.
Trigueros did not give details, such as whether the country might peg its
currency, the colon, to the dollar or adopt the U.S. currency outright -- as
Panama has done and as Ecuador is doing. The colon has traded at 8.7 to the
dollar since February 1994.
He also said there is no hurry to dollarize, "since our country has a stable
currency," and any move to the dollar would need a broad consensus. "It is an
alternative we are studying," he said.
Dollarization would help stabilize the economy and make imports and foreign
trade easier. But it would limit the government's economic options, increase
competition for local producers and might make the country's exports more
"Any adjustment at this time would put us in a straitjacket which would
the export sector from continued growth," said Francisco Escobar, president of
the Salvadoran Association of Construction Industries.
But Patricio Parras, president of the Salvadoran Construction Industry
Chamber, said it would be in line with "the world tendency toward unification
"Before, when one spoke of dollarization, it seemed as if El Salvador would
a pioneer. But today, internationally, they are talking about the dollarization of
the Americas," Parras added.
Copyright 2000 The Associated Press.