Argument: Dollarization helps encourage foreign investment

Issue Report: Dollarization


  • Daniel Gross. “The Case for Fewer but Stronger Currencies”. New York Times. February 19, 2006 – “But economists say that smaller countries can encourage investment by lashing their monetary fortunes to larger regional powers. In Latin America, companies that need to make long-term investments — like utilities — are forced to borrow in dollars while they operate in local currencies, leaving them exposed to currency risk. Now that El Salvador has adopted the dollar, companies there can borrow or engage in hedging transactions in dollars with relative ease.”