Ecuador’s President Noboa has reaffirmed the U.S. dollar as the sole official currency with Executive Decree No. 565, amidst a contested political atmosphere and upcoming elections. This measure is designed to curb proposed alternatives and solidify dollarisation policy exclusively under the Executive Branch. The decree reflects the ongoing political debate regarding financial stability and currency control in the country.
Ecuador’s President Daniel Noboa has enacted Executive Decree No. 565, formally establishing the U.S. dollar as the exclusive legal tender of the nation. This decree, issued on March 18 from Cuenca, addresses concerns surrounding potential alternatives to the dollarised economy, especially with an imminent presidential election on the horizon, as reported by El Universo.
Through this decree, Noboa defined the U.S. dollar as the sole monetary means in Ecuador, calling on his National Democratic Alliance (ADN) party to recommend a constitutional amendment. This reform proposal would assign monetary policy exclusively to the Executive Branch via the Central Bank, ensuring steadfast dollarisation amidst growing opposition activities.
In a recent interview with Radio W, Noboa articulated that the decree’s objective is to “strengthen dollarisation” in light of emerging opposition suggestions regarding an Ecuadorian currency or electronic alternatives. His comments targeted exiled former president Rafael Correa’s political faction, emphasizing the risks associated with diverging from dollar reliance.
The issuance of this decree coincides with the upcoming April 13 presidential runoff, featuring conservative Noboa vying for re-election against leftist candidate Luisa González, an ally of Correa’s Citizen Revolution movement. González is perceived by some as favoring a shift away from dollar dominance.
The proposed constitutional modification would require all financial transactions in Ecuador to be executed in U.S. dollars, while also preventing the Central Bank from circulating any alternative currencies or financing public sector entities. This aligns with recent critiques from leftist assemblywoman Paola Cabezas, who suggested an “Ecuadorian-style” dollarisation approach, sparking controversy within the political landscape.
González has clarified that her party does not intend to abandon the dollar, asserting that her colleagues misrepresented their stance on the issue. Additionally, according to El Universo, Mateo Villalba, former manager of the central bank, has characterized the decree as politically driven and unnecessary since dollarisation is mandated by existing legislation.
Ecuador initially adopted the dollar as its official currency in 2000, following a severe financial crisis marked by skyrocketing inflation and bank failures. The continued dollarisation has been credited with providing economic stability despite numerous challenges, including fluctuations in oil prices and other financial crises worldwide over the subsequent decades.
In conclusion, President Noboa’s Executive Decree No. 565 consolidates the U.S. dollar’s position as Ecuador’s official currency amidst increasing political tension and opposing views on monetary policy. As the nation approaches a pivotal presidential election, the decree reflects Noboa’s intent to fortify dollarisation against potential risks posed by alternative monetary proposals. Critics view the decree as politically motivated, yet it underscores Ecuador’s established commitment to dollar reliance since 2000, which has offered monetary stability during various economic adversities.
Original Source: www.intellinews.com
