Ecuador’s Noboa Reaffirms Dollar Dominance Amid Electoral Uncertainty

Ecuador’s President Daniel Noboa has reaffirmed the US dollar as the official currency through Executive Decree No. 565 amidst electoral tensions. This decree aims to strengthen dollarisation, proposing constitutional reforms to restrict monetary policy to the Executive Branch. With an upcoming presidential runoff, Noboa’s actions respond to criticism from leftist opposition regarding alternative currency proposals.

Ecuador’s President Daniel Noboa has issued Executive Decree No. 565, reasserting the US dollar as Ecuador’s exclusive official payment method. This decision comes in light of upcoming presidential elections and concerns regarding potential alternatives to the dollarised economy, as reported by El Universo. The decree clarifies that the “United States dollar [is] the monetary unit and sole official means of payment in the Republic of Ecuador.”

In his decree, Noboa has called upon his National Democratic Alliance (ADN) party to propose an amendment to Article 303 of the Constitution. This reform is intended to allocate monetary policy exclusively to the Executive Branch operating through the Central Bank. Noboa stated that the decree aims to “strengthen dollarisation” amid rising opposition proposals for alternative currencies, directly challenging the assertions from exiled former president Rafael Correa’s political faction.

The decree emerges as the nation approaches the April 13 presidential runoff election, featuring Noboa, a conservative candidate seeking reelection, and Luisa González, a leftist candidate aligned with Correa’s Citizen Revolution movement. González has faced scrutiny for potentially promoting alternatives to the dollar.

The proposed constitutional amendment would require all financial transactions in Ecuador to be conducted in US dollars and would ban the Central Bank from issuing any currency other than the dollar while forbidding financial support to public institutions. Noboa’s decree is perceived as a response to leftist assemblywoman Paola Cabezas, who suggested modifying the dollarised monetary system.

González has attempted to clarify her party’s position, rejecting suggestions to abandon the dollar and asserting that her colleagues had misrepresented the topic. Mateo Villalba, the former manager of Ecuador’s central bank, criticized the decree as politically motivated and unnecessary, emphasizing that dollarisation is already supported by the Organic Monetary and Financial Code.

Ecuador adopted the US dollar as its official currency in 2000 during a significant financial crisis that resulted in hyperinflation and the downfall of numerous banks. Despite facing various external economic challenges, such as oil price fluctuations and the global financial crisis, Ecuador’s central bank maintains that dollarisation has established a stable monetary environment for the nation over the past two decades.

In conclusion, President Daniel Noboa’s Executive Decree No. 565 serves to solidify the US dollar’s role as Ecuador’s sole currency in the face of political opposition and presidential election pressures. His proposed constitutional reform seeks to ensure that monetary policy is centralized within the Executive Branch while countering calls for alternative currency models. As Ecuador approaches a pivotal presidential runoff, the implications of this decree highlight the ongoing debate surrounding the nation’s monetary policy and economic stability.

Original Source: www.intellinews.com