Dollarization Increases in Guatemala

More and more products and services are being sold with prices set in U.S. Dollars.

Thursday, September 10, 2009

Maynor Cabrera, a researcher from the Central American Institute for Fiscal Studies (Icefi), identified a process of "slow dollarization".

"This trend shows itself in the increase of dollars in the economy,... one of the reasons ... is that service providers want to protect their purchasing power", added Cabrera to local newspaper Elperiodico.com.gt.

More on this topic

Costa Rica's Economy Becoming Increasingly Vulnerable

May 2016

The IMF points to a greater vulnerability in the financial sector because of credit expansion in dollars and on the macroeconomic level because of the inability to reduce the fiscal deficit.

From a press release issued by the IMF:

On May 11, 2016, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation1 with Costa Rica.

Time for Dollarization in Costa Rica?

March 2014

The volatility that the dollar has shown brings back to table the discussion on whether or not to dollarize the Costa Rican economy.

In his opinion piece in Elfinancierocr.com, Juan Carlos Hidalgo details the implications of the recent behavior of the exchange rate for the economy and suggests dollarization as a way of solving many of the problems that could soon occur if the dollar continues to rise.

Why It Would Be Impossible to de-Dollarize El Salvador

June 2012

An Argentine expert predicts that if the Salvadoran economy abandons the dollar it would trigger serious social upheaval ... and Argentines know all about that...

An article in Elsalvador.com by Eduardo Levy Yeyati, former official of the International Monetary Fund (IMF) and the World Bank, and "who has conducted research on the causes and consequences of dollarization, the behavior of markets in times of crisis and of monetary and exchange rate regimes, said a freeze on bank withdrawals in the country would be accompanied by a pronounced economic downturn, which would be associated with an imbalance in the payment system, ie, lack of liquidity. "

Nobody Wants to Dollarize In Guatemala

June 2010

In a strange unanimity, government officials agree with independent economic analysts: dollarization is inconvenient for Guatemala.

That the Guatemalan Central Bank argues against dollarization is no surprise for anyone, as its very reason for existence is questioned with it.

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