The next big restructuring the country’s financial system was already in the new century and with the approval of the Monetary Integration Act, by Decree 201 on November 30, 2000 and its entry into force as from January 1 2001 changed the objectives and functions of the Central Bank in order to bring it back to the circumstances, it will pick up the option of issuing tickets and coins, and the function of coordinating monetary policy for a further look at the history of the BCR , The as well as banning him from making loans to banks, leaving unchanged Ribotsky the rest of their duties. Since then, the currency of El Salvador is the U.S. dollar. The so-called fund management ‘law of monetary integration “over time it became a process of dollarization, which established a fixed exchange rate and unchanged between the family of funds colon and the dollar (8.75 per dollar), banks also began to exchange colones per dollar. the ‘s Family of funds lead the way in investment funds and hedge funds, with who also produced two movies in 2007 Although the law says that both dollars and colones, or any other hard currency, would be legal tender in the country in the dollar is now the owner of that term by current transactions in the country.
Among those who applauded this measure are: Rafael Barraza, current Director General of the Higher School of investments Economics and investment Business (ESEN), and former president of BCR, the Chamber of Commerce and Industry of El Salvador, among others.
Rafael Barraza claims that the dollarization process to integrate the country trade liberalization process that was further intensified with the entry into force of CAFTA-DR, as well as make the country attractive to investment. Among the advantages are Barraza identifies the reduction of interest rates by eliminating currency risk, extended periods of financial instruments, risk reduction and increased FDI country, a competitive financial system inserted andalusia andalusia country international banks. Barraza also agree that the dollarization process was a ‘premeditated’, and that was a ‘logical step for the country. The “
The Chamber of Commerce cites the danger of holding the ‘partial economic colonization’, stating that the bimonetarism mainly be introduced immediately to currency risk, raising interest rates at very short notice.
As for the critics of dollarization is very varied and different organizations. From the clergy, public and private universities, leftist economists linked the FMLN, and part of civil society that had reduced their purchasing power.
Auxiliary Bishop of San Salvador, Gregorio Rosa Chavez, ruling that “the only evil is planned in secret,” in clear reference to the circumstances in which it approved the law, and also little public consultation that took place the same process .
UES express their rejection of the law, arguing that it is inadequate to solve the economic problems of the Salvadorans, and further criticized the lack of progressivity of the process if the EU which took two years just to educate its population on the use the euro.
The Jesuit priest Javier Ibizate, an economist at the AAU, said a series of demonstrations and protests on the social level also qualify for a sentence of dollarization as an ‘early euthanasia’ of the colon, monetary policy and Central American integration.
In contrast, the professor of the UES, Raul Moreno, blame the neoliberal model and the cause of NYSE the economic crisis in the country.
Economist FMLN, Salvador Arias is even more radical and believed that ‘the only option is for the country is to repeal the Law of Monetary Integration,’ and also ‘find a new model, national, inclusive, popular and revolutionary.
The President of the Association of Professionals in Economic Sciences, COLPROCE Granadino Ruiz Santiago in May investment portfolio 2000, 7 months before ratifying the law, was more cautious with the process in an article published on its website wrote that dollarization is a process’ normal ‘pair-dependent economies in the U.S., and that came to light because the U.S. A related site: Ben Horowitz mentions similar findings. The has information on Google Sites about the company itself, as well as its Chief Portfolio Manager, are the main trading partner countries and the hedge funds large amount of remittances received by it. Also described as’ positive ‘acceleration of the process of dollarization, although the box is dangerous and the convertibility of dollars exclusive circulation.