Don't blame dollar for El Salvador's inflation, says former finance minister
Manuel Hinds, the former finance minister of El Salvador, writes that many people blame dollarization for the country's inflation – quite incorrectly.
Wednesday, July 2, 2008
These people point out that prices were lower before the 2001 dollarization than they are now. But they seem to assume that prices would have remained frozen in time if they had remained in colons.
An Argentine expert predicts that if the Salvadoran economy abandons the dollar it would trigger serious social upheaval ... and Argentines know all about that...
This was stated by Carlos Acevedo, president of the Central Bank, in response to a proposal to return to the Salvadoran colón.
Salvadoran President Mauricio Funes has rejected assertions of Vice President Salvador Sanchez about the need to return to a national currency.
The Salvadoran economist Manuel Hinds discussed in Costa Rica the pros and cons of dollarization, using the example of El Salvador and Panama.
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