Currency substitution

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Worldwide official use of foreign currency or pegs: .mw-parser-output .legend{page-break-inside:avoid;break-inside:avoid-column}.mw-parser-output .legend-color{display:inline-block;min-width:1.25em;height:1.25em;line-height:1.25;margin:1px 0;text-align:center;border:1px solid black;background-color:transparent;color:black}.mw-parser-output .legend-text{} United States dollar users, including the United States Currencies pegged to the United States dollar Euro users, including the Eurozone Currencies pegged to the euro Australian dollar users, including Australia Indian rupee users and pegs, including India New Zealand dollar users, including New Zealand Pound sterling users and pegs, including the United Kingdom Russian ruble users, including Russia and other territories South African rand users (CMA, including South Africa) Three cases of a country using or pegging the currency of a neighbor Foreign currency uses and pegs.svg
Worldwide official use of foreign currency or pegs:
   United States dollar users, including the United States
  Currencies pegged to the United States dollar
   Euro users, including the Eurozone
  Currencies pegged to the euro

   Australian dollar users, including Australia
   Indian rupee users and pegs, including India
   New Zealand dollar users, including New Zealand
   Pound sterling users and pegs, including the United Kingdom
   Russian ruble users, including Russia and other territories
   South African rand users (CMA, including South Africa)

  Three cases of a country using or pegging the currency of a neighbor

Currency substitution is the use of a foreign currency in parallel to or instead of a domestic currency. [1]

Contents

Currency substitution can be full or partial. Full currency substitution can occur after a major economic crisis, such as in Ecuador, El Salvador, and Zimbabwe. Some small economies, for whom it is impractical to maintain an independent currency, use the currencies of their larger neighbours; for example, Liechtenstein uses the Swiss franc.

Partial currency substitution occurs when residents of a country choose to hold a significant share of their financial assets denominated in a foreign currency. It can also occur as a gradual conversion to full currency substitution; for example, Argentina and Peru were both in the process of converting to the U.S. dollar during the 1990s.

Name

"Dollarization", when referring to currency substitution, does not necessarily involve use of the United States dollar. [2] The major currencies used as substitutes are the US dollar and the euro.

Origins

Map of current exchange rate regimes (2018). De facto exchange-rate arrangements in 2018 as classified by the International Monetary Fund: Floating (floating and free floating) Soft pegs (conventional peg, stabilized arrangement, crawling peg, crawl-like arrangement, pegged exchange rate within horizontal bands) Hard pegs (no separate legal tender, currency board) Residual (other managed arrangement) Exchange rate arrangements map.png
Map of current exchange rate regimes (2018). De facto exchange-rate arrangements in 2018 as classified by the International Monetary Fund:
   Floating (floating and free floating)
  Soft pegs ( conventional peg , stabilized arrangement, crawling peg , crawl-like arrangement, pegged exchange rate within horizontal bands )
  Hard pegs (no separate legal tender, currency board )
  Residual (other managed arrangement)

After the gold standard was abandoned at the outbreak of World War I and the Bretton Woods Conference following World War II, some countries sought exchange rate regimes to promote global economic stability, and hence their own prosperity. Countries usually peg their currency to a major convertible currency. "Hard pegs" are exchange rate regimes that demonstrate a stronger commitment to a fixed parity (i.e. currency boards) or relinquish control over their own currency (such as currency unions) while "soft pegs" are more flexible and floating exchange rate regimes. [3] The collapse of "soft" pegs in Southeast Asia and Latin America in the late 1990s led to currency substitution becoming a serious policy issue. [4]

A few cases of full currency substitution prior to 1999 had been the consequence of political and historical factors. In all long-standing currency substitution cases, historical and political reasons have been more influential than an evaluation of the economic effects of currency substitution. [5] Panama adopted the US dollar as legal tender after independence as the result of a constitutional ruling. [6] Ecuador and El Salvador became fully dollarized economies in 2000 and 2001 respectively, for different reasons. [5] Ecuador underwent currency substitution to deal with a widespread political and financial crisis resulting from massive loss of confidence in its political and monetary institutions. By contrast, El Salvador's official currency substitution was a result of internal debates and in a context of stable macroeconomic fundamentals and long-standing unofficial currency substitution. The eurozone adopted the euro (€) as its common currency and sole legal tender in 1999, which might be considered a variety of full-commitment regime similar to full currency substitution despite some evident differences from other currency substitutions. [7]

Measures

There are two common indicators of currency substitution. The first measure is the share of foreign currency deposits (FCD) in the domestic banking system in the broad money including FCD. The second is the share of all foreign currency deposits held by domestic residents at home and abroad in their total monetary assets. [6]

Types

Unofficial currency substitution or de facto currency substitution is the most common type of currency substitution. Unofficial currency substitution occurs when residents of a country choose to hold a significant share of their financial assets in foreign currency, even though the foreign currency is not legal tender there. [8] They hold deposits in the foreign currency because of a bad track record of the local currency, or as a hedge against inflation of the domestic currency.

Official currency substitution or full currency substitution happens when a country adopts a foreign currency as its sole legal tender, and ceases to issue the domestic currency. Another effect of a country adopting a foreign currency as its own is that the country gives up all power to vary its exchange rate. There are a small number of countries adopting a foreign currency as legal tender.

Full currency substitution has mostly occurred in Latin America, the Caribbean and the Pacific, as many countries in those regions see the United States Dollar as a stable currency compared to the national one. [9] For example, Panama underwent full currency substitution by adopting the US dollar as legal tender in 1904. This type of currency substitution is also known as de jure currency substitution.

Currency substitution can be used semiofficially (or officially, in bimonetary systems), where the foreign currency is legal tender alongside the domestic currency. [10]

In literature, there is a set of related definitions of currency substitution such as external liability currency substitution, domestic liability currency substitution, banking sector's liability currency substitution or deposit currency substitution, and credit dollarization. External liability currency substitution measures total external debt (private and public) denominated in foreign currencies of the economy. [10] [11] Deposit currency substitution can be measured as the share of foreign currency deposits in the total deposits of the banking system, and credit currency substitution can be measured as the share of dollar credit in the total credit of the banking system. [12]

Effects

On trade and investment

One of the main advantages of adopting a strong foreign currency as sole legal tender is to reduce the transaction costs of trade among countries using the same currency. [13] There are at least two ways to infer this impact from data. The first is the significantly negative effect of exchange rate volatility on trade in most cases, and the second is an association between transaction costs and the need to operate with multiple currencies. [14] Economic integration with the rest of the world becomes easier as a result of lowered transaction costs and stabler prices. [2] Rose (2000) applied the gravity model of trade and provided empirical evidence that countries sharing a common currency engage in significantly increased trade among them, and that the benefits of currency substitution for trade may be large. [15]

Countries with full currency substitution can invoke greater confidence among international investors, inducing increased investments and growth. The elimination of the currency crisis risk due to full currency substitution leads to a reduction of country risk premiums and then to lower interest rates. [2] These effects result in a higher level of investment. However, there is a positive association between currency substitution and interest rates in a dual-currency economy. [16]

On monetary and exchange rate policies

Official currency substitution helps to promote fiscal and monetary discipline and thus greater macroeconomic stability and lower inflation rates, to lower real exchange rate volatility, and possibly to deepen the financial system. [14] Firstly, currency substitution helps developing countries, providing a firm commitment to stable monetary and exchange rate policies by forcing a passive monetary policy. Adopting a strong foreign currency as legal tender will help to "eliminate the inflation-bias problem of discretionary monetary policy". [17] Secondly, official currency substitution imposes stronger financial constraint on the government by eliminating deficit financing by issuing money. [18] An empirical finding suggests that inflation has been significantly lower in economies with full currency substitution than nations with domestic currencies. [19] The expected benefit of currency substitution is the elimination of the risk of exchange rate fluctuations and a possible reduction in the country's international exposure. Currency substitution cannot eliminate the risk of an external crisis but provides steadier markets as a result of eliminating fluctuations in exchange rates. [2]

On the other hand, currency substitution leads to the loss of seigniorage revenue, the loss of monetary policy autonomy, and the loss of the exchange rate instruments. Seigniorage revenues are the profits generated when monetary authorities issue currency. When adopting a foreign currency as legal tender, a monetary authority needs to withdraw the domestic currency and give up future seigniorage revenue. The country loses the rights to its autonomous monetary and exchange rate policies, even in times of financial emergency. [2] [20] For example, former chairman of the Federal Reserve Alan Greenspan has stated that the central bank considers the effects of its decisions only on the US economy. [21] In a full currency substituted economy, exchange rates are indeterminate and monetary authorities cannot devalue the currency. [22] In an economy with high currency substitution, devaluation policy is less effective in changing the real exchange rate because of significant pass-through effects to domestic prices. [2] However, the cost of losing an independent monetary policy exists when domestic monetary authorities can commit an effective counter-cyclical monetary policy, stabilizing the business cycle. This cost depends adversely on the correlation between the business cycle of the client country (the economy with currency substitution) and the business cycle of the anchor country. [13] In addition, monetary authorities in economies with currency substitution diminish the liquidity assurance to their banking system. [2] [23]

On banking systems

In an economy with full currency substitution, monetary authorities cannot act as lender of last resort to commercial banks by printing money. The alternatives to lending to the bank system may include taxation and issuing government debt. [24] The loss of the lender of last resort is considered a cost of full currency substitution. This cost depends on the initial level of unofficial currency substitution before moving to a full currency substituted economy. This relation is negative because in a heavily currency substituted economy, the central bank already fears difficulties in providing liquidity assurance to the banking system. [25] However, literature points out the existence of alternative mechanisms to provide liquidity insurance to banks, such as a scheme by which the international financial community charges an insurance fee in exchange for a commitment to lend to a domestic bank. [26]

Commercial banks in countries where saving accounts and loans in foreign currency are allowed may face two types of risks:

  1. Currency mismatch risk: Assets and liabilities on the balance sheets may be in different denominations. This may arise if the bank converts foreign currency deposits into local currency and lends in local currency or vice versa.
  2. Default risk: Arises if the bank uses the foreign currency deposits to lend in foreign currency. [27]

However, currency substitution eliminates the probability of a currency crisis that negatively affects the banking system through the balance sheet channel. Currency substitution may reduce the possibility of systematic liquidity shortages and the optimal reserves in the banking system. [28] Research has shown that official currency substitution has played a significant role in improving bank liquidity and asset quality in Ecuador and El Salvador. [29]

Determinants of the process

The dynamics of the flight from domestic money

High and unanticipated inflation rates decrease the demand for domestic money and raise the demand for alternative assets, including foreign currency and assets dominated by foreign currency. This phenomenon is called the "flight from domestic money". It results in a rapid and sizable process of currency substitution. [30] In countries with high inflation rates, the domestic currency tends to be gradually displaced by a stable currency. At the beginning of this process, the store-of-value function of the domestic currency is replaced by the foreign currency. Then, the unit-of-account function of the domestic currency is displaced when many prices are quoted in a foreign currency. A prolonged period of high inflation will induce the domestic currency to lose its function as medium of exchange when the public carries out many transactions in foreign currency. [31] : 1 

Ize and Levy-Yeyati (1998) examine the determinants of deposit and credit currency substitution, concluding that currency substitution is driven by the volatility of inflation and the real exchange rate. Currency substitution increases with inflation volatility and decreases with the volatility of the real exchange rate. [32]

Institutional factors

The flight from domestic money depends on a country's institutional factors. The first factor is the level of development of the domestic financial market. An economy with a well-developed financial market can offer a set of alternative financial instruments denominated in domestic currency, reducing the role of foreign currency as an inflation hedge. The pattern of the currency substitution process also varies across countries with different foreign exchange and capital controls. In a country with strict foreign exchange regulations, the demand for foreign currency will be satisfied in the holding of foreign currency assets abroad and outside the domestic banking system. This demand often puts pressure on the parallel market of foreign currency and on the country's international reserves. [30] Evidence for this pattern is given in the absence of currency substitution during the pre-reform period in most transition economies, because of constricted controls on foreign exchange and the banking system. [31] : 13  In contrast, by increasing foreign currency reserves, a country might mitigate the shift of assets abroad and strengthen its external reserves in exchange for a currency substitution process. However, the effect of this regulation on the pattern of currency substitution depends on the public's expectations of macroeconomic stability and the sustainability of the foreign exchange regime. [30]

Anchor currencies

Australian dollar

Euro

Indian rupee

New Zealand dollar

Pound sterling

British Overseas Territories using the pound, or a local currency pegged to the pound, as their currency:

Crown Dependencies using a local issue of the pound as their currency:

Under plans published in the Sustainable Growth Commission report by the Scottish National Party, an independent Scotland would use the pound as their currency for the first 10 years of independence. This has become known as sterlingisation.

South African rand

United States dollar

Used exclusively

Used partially

Others

See also

Related Research Articles

A currency is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general definition is that a currency is a system of money in common use within a specific environment over time, especially for people in a nation state. Under this definition, the British Pound sterling (£), euros (€), Japanese yen (¥), and U.S. dollars (US$) are examples of (government-issued) fiat currencies. Currencies may act as stores of value and be traded between nations in foreign exchange markets, which determine the relative values of the different currencies. Currencies in this sense are either chosen by users or decreed by governments, and each type has limited boundaries of acceptance; i.e., legal tender laws may require a particular unit of account for payments to government agencies.

<span class="mw-page-title-main">Euro</span> Currency of most countries in the European Union

The euro is the official currency of 20 of the 27 member states of the European Union. This group of states is officially known as the euro area or, commonly, the eurozone, and includes about 344 million citizens as of 2023. The euro is divided into 100 euro cents.

<span class="mw-page-title-main">Gold standard</span> Monetary system based on the value of gold

A gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold. The gold standard was the basis for the international monetary system from the 1870s to the early 1920s, and from the late 1920s to 1932 as well as from 1944 until 1971 when the United States unilaterally terminated convertibility of the US dollar to gold, effectively ending the Bretton Woods system. Many states nonetheless hold substantial gold reserves.

<span class="mw-page-title-main">Australian dollar</span> Currency of Australia and its territories

The Australian dollar is the official currency and legal tender of Australia, including all of its external territories, and three independent sovereign Pacific Island states: Kiribati, Nauru, and Tuvalu. As of 2022, it is currently the sixth most-traded currency in the foreign exchange market and also the seventh most-held reserve currency in global reserves.

<span class="mw-page-title-main">Estonian kroon</span> Former currency of Estonia

The kroon was the official currency of Estonia for two periods in history: 1928–1940 and 1992–2011. Between 1 January and 14 January 2011, the kroon circulated together with the euro, after which the euro became the sole legal tender in Estonia. The kroon was subdivided into 100 cents.

The Hong Kong dollar is the official currency of the Hong Kong Special Administrative Region. It is subdivided into 100 cents or 1000 mils. The Hong Kong Monetary Authority is the monetary authority of Hong Kong and the Hong Kong dollar.

In macroeconomics, hard currency, safe-haven currency, or strong currency is any globally traded currency that serves as a reliable and stable store of value. Factors contributing to a currency's hard status might include the stability and reliability of the respective state's legal and bureaucratic institutions, level of corruption, long-term stability of its purchasing power, the associated country's political and fiscal condition and outlook, and the policy posture of the issuing central bank.

<span class="mw-page-title-main">Currency board</span> Monetary authority which maintains a fixed exchange rate to a foreign currency

In public finance, a currency board is a monetary authority which is required to maintain a fixed exchange rate with a foreign currency. This policy objective requires the conventional objectives of a central bank to be subordinated to the exchange rate target. In colonial administration, currency boards were popular because of the advantages of printing appropriate denominations for local conditions, and it also benefited the colony with the seigniorage revenue. However, after World War II many independent countries preferred to have central banks and independent currencies.

<span class="mw-page-title-main">Italian lira</span> Former currency of Italy

The lira was the currency of Italy between 1861 and 2002. It was introduced by the Napoleonic Kingdom of Italy in 1807 at par with the French franc, and was subsequently adopted by the different states that would eventually form the Kingdom of Italy in 1861. It was subdivided into 100 centesimi, which means "hundredths" or "cents". The lira was also the currency of the Albanian Kingdom from 1941 to 1943.

The pound is the currency of Guernsey. Since 1921, Guernsey has been in currency union with the United Kingdom and the Guernsey pound is not a separate currency but is a local issue of sterling banknotes and coins, in a similar way to the banknotes issued in Scotland, England and Northern Ireland. It can be exchanged at par with other sterling coinage and notes.

The vatu is the currency of Vanuatu. The vatu has no subdivisions.

<span class="mw-page-title-main">Exchange rate regime</span>

An exchange rate regime is a way a monetary authority of a country or currency union manages the currency about other currencies and the foreign exchange market. It is closely related to monetary policy and the two are generally dependent on many of the same factors, such as economic scale and openness, inflation rate, the elasticity of the labor market, financial market development, and capital mobility.

The Convertibility plan was a plan by the Argentine Currency Board that pegged the Argentine peso to the U.S. dollar between 1991 and 2002 in an attempt to eliminate hyperinflation and stimulate economic growth. While it initially met with considerable success, the board's actions ultimately failed. The peso was only pegged to the dollar until 2002.

<span class="mw-page-title-main">Liberian dollar</span> Currency of Liberia

The dollar has been the currency of Liberia since 1943. It was also the country's currency between 1847 and 1907. It is normally abbreviated with the sign $, or alternatively L$ or LD$ to distinguish it from other dollar-named currencies. It is divided into 100 cents.

The pound is the currency of the Isle of Man, at parity with sterling. The Manx pound is divided into 100 pence. Notes and coins, denominated in pounds and pence, are issued by the Isle of Man Government.

<span class="mw-page-title-main">World currency</span> Currency that is widely used internationally

In international finance, a world currency, supranational currency, or global currency is a currency that would be transacted internationally, with no set borders.

<span class="mw-page-title-main">United States dollar</span> Official currency of the United States of America

The United States dollar is the official currency of the United States and several other countries. The Coinage Act of 1792 introduced the U.S. dollar at par with the Spanish silver dollar, divided it into 100 cents, and authorized the minting of coins denominated in dollars and cents. U.S. banknotes are issued in the form of Federal Reserve Notes, popularly called greenbacks due to their predominantly green color.

<span class="mw-page-title-main">International status and usage of the euro</span>

The international status and usage of the euro has grown since its launch in 1999. When the euro formally replaced 12 currencies on 1 January 2002, it inherited their use in territories such as Montenegro and replaced minor currencies tied to pre-euro currencies, such as in Monaco. Four small states have been given a formal right to use the euro, and to mint their own coins, but all other usage outside the eurozone has been unofficial. With or without an agreement, these countries, unlike those in the eurozone, do not participate in the European Central Bank or the Eurogroup.

Domestic liability dollarization (DLD) refers to the denomination of banking system deposits and lending in a currency other than that of the country in which they are held. DLD does not refer exclusively to denomination in US dollars, as DLD encompasses accounts denominated in internationally traded "hard" currencies such as the British pound sterling, the Swiss franc, the Japanese yen, and the Euro.

<span class="mw-page-title-main">International use of the U.S. dollar</span> Use of US dollars around the world

The United States dollar was established as the world's foremost reserve currency by the Bretton Woods Agreement of 1944. It claimed this status from sterling after the devastation of two world wars and the massive spending of the United Kingdom's gold reserves. Despite all links to gold being severed in 1971, the dollar continues to be the world's foremost reserve currency. Furthermore, the Bretton Woods Agreement also set up the global post-war monetary system by setting up rules, institutions and procedures for conducting international trade and accessing the global capital markets using the US dollar.

References

Footnotes

  1. ↑ New estimates of U.S. currency abroad, the domestic money supply and the unreported Economy Edgar L. Feige September 2011.
  2. 1 2 3 4 5 6 7 Berg, Andrew; Borensztein, Eduardo (2000). "The Pros and Cons of Full Dollarization". IMF Working Paper; Full Dollarization. IMF (/50). Retrieved 13 October 2011.
  3. ↑ Yeyati (2003) at 1.
  4. ↑ Rochon, Louis-Philippe (2003). Dollarization Lessons from Europe and the Americas . London and New York: Routledge. pp.  1. ISBN   9780415298780.
  5. 1 2 Yeyati (2003) at 3.
  6. 1 2 Savastano at 7.
  7. ↑ Yeyati (2003) at 5.
  8. ↑ Balino; Berensztein (1999). "Monetary Policy in Dollarized Economies". IMF Occasional Paper 171.
  9. ↑ Mundell, R. A. (1961). "A Theory of Optimum Currency Areas". American Economic Review . 51 (4): 657–665. JSTOR   1812792.
  10. 1 2 Bogetic (200). "Official Dollarization: Current Experiences and Issues". Cato Journal. 20 (2): 179–213.
  11. ↑ Berkmen, S. Pelin; Cavallo, Eduardo (2010). "Exchange Rate Policy and Liability currency substitution: What Do the Data Reveal about Causality?". Review of International Economics. 18 (5): 781–795. doi:10.1111/j.1467-9396.2010.00890.x. S2CID   154678349.
  12. ↑ Pinon, Marco (2008). Macroeconomic Implications of Financial currency substitution The Case of Uruguay. Washington DC: International Monetary Fund. p. 22.
  13. 1 2 Alesina, Alberto; Barro (2001). "Dollarization". The American Economic Review. 91 (2): 381–385. doi:10.1257/aer.91.2.381. JSTOR   2677793.
  14. 1 2 Yeyati (2003) at 22.
  15. ↑ Rose, Andrew (2000). "One Money, One Market: the effect of common currencies on trade". Economic Policy. 15 (30): 8–0. doi:10.1111/1468-0327.00056.
  16. ↑ Honohan, Patrick (2007). "Dollarization and Exchange Rate Fluctuations" (PDF). World Bank Policy Research Working Paper. Policy Research Working Papers (4172). doi:10.1596/1813-9450-4172. hdl: 10986/7252 .
  17. ↑ Alesina, Alberto; Barro (2001). "Dollarization". The American Economic Review. 91 (2): 382. doi:10.1257/aer.91.2.381. JSTOR   2677793.
  18. ↑ Yeyati (2003) at 23.
  19. ↑ Edwards, Sebastian; Magendzo, I. Igal (2003). "Dollarization And Economic Performance: What Do We Really Know?". International Journal of Finance and Economics. 8 (4): 351–363. CiteSeerX   10.1.1.557.6231 . doi:10.1002/ijfe.217.
  20. ↑ Broda, Levy Yeyati, Christian, Eduardo (2003). "Endogenous deposit dollarization". Federal Reserve Bank of New York.{{cite journal}}: Cite journal requires |journal= (help)CS1 maint: multiple names: authors list (link)
  21. ↑ Moreno-Bird, Juan Carlos (Fall 1999). "Dollarization in Latin America: Is it desirable?". ReVista: Harvard Review of Latin America. Archived from the original on 11 August 2011. Retrieved 27 June 2012.
  22. ↑ John, Kareken; Wallace (1981). "On the Indeterminacy of Equilibrium Exchange Rates". Quarterly Journal of Economics. 96 (2): 207–222. doi:10.2307/1882388. JSTOR   1882388.
  23. ↑ Yeyati, Eduardo Levy (2008). "Liquidity Insurance in a Financially Dollarized Economy". In Edwards; Garcia (eds.). Financial Markets Volatility and Performance in Emerging Markets. University of Chicago Press. pp. 185–218. ISBN   978-0-226-18495-1.
  24. ↑ Bencivenga, Valerie; Huybens, Smith (2001). "Dollarization and the Integration of International Capital Markets: a Contribution to the Theory of Optimal Currency Areas". Journal of Money, Credit and Banking. 33 (2, Part 2): 548–589. doi:10.2307/2673916. JSTOR   2673916.
  25. ↑ Broda, Christian; Yeyati (2001). "Dollarization and the Lender of Last Resort". Book: Dollarization: 100–131.
  26. ↑ Yeyati (2003) at 31.
  27. ↑ Kutan, Rengifo, Ozsoz, Ali, Erick, Emre. "Evaluating the Effects of Deposit Dollarization in Bank Profitability" (PDF). Fordham University Economics Department.{{cite web}}: CS1 maint: multiple names: authors list (link)[ permanent dead link ]
  28. ↑ Yeyati (2003) at 34.
  29. ↑ "Federal Reserve Bank of Atlanta, Official Dollarization and the Banking System in Ecuador and El Salvador, 2006" (PDF). Archived from the original (PDF) on 19 October 2012. Retrieved 14 September 2012.
  30. 1 2 3 Savastano.
  31. 1 2 Sahay, Ratna; Vegh, Carlos (September 1995). "Dollarization in Transition Economies: Evidence and Policy Implications". IMF Working Paper No. 95/96. SSRN   883243.
  32. ↑ Catão, Luis; Terrrones, Marco E. (August 2000). "Determinants of Dollarization: The Banking Side". IMF Working Paper No. 00/146: 5. SSRN   879949.
  33. 1 2 3 4 5 6 7 8 9 10 Edwards, Sebastian (May 2001). "Dollarization and Economic Performance: An Empirical Investigation". NBER Working Paper No. 8274. doi: 10.3386/w8274 .
  34. ↑ Catalog of the coins of Nauru Numista (https://en.numista.com). Retrieved on 2023-02-17.
  35. 1 2 Ruwitch, John; Park, Ju-min (2 June 2013). "Insight: North Korean economy surrenders to foreign currency invasion". Reuters . Changbai, China/Seoul. Retrieved 11 January 2017.
  36. ↑ Catalog of the coins of the British Antarctic Territory Numista (https://en.numista.com). Retrieved on 2023-01-17.
  37. ↑ Catalog of the coins of the British Indian Ocean Territory Numista (https://en.numista.com). Retrieved on 2023-01-17.
  38. ↑ Catalog of the coins of Saint Helena, Ascension and Tristan da Cunha Numista (https://en.numista.com). Retrieved on 2023-01-17.
  39. ↑ Catalog of the coins of South Georgia and the South Sandwich Islands Numista (https://en.numista.com). Retrieved on 2023-01-17.
  40. ↑ Catalog of the coins of Alderney Numista (https://en.numista.com). Retrieved on 2023-01-17.
  41. ↑ Catalog of the coins of the British Virgin Islands Numista (https://en.numista.com). Retrieved on 2022-09-03.
  42. ↑ Catalog of the coins of the Marshall Islands Numista (https://en.numista.com). Retrieved on 2022-09-03.
  43. ↑ Catalog of the coins of Palau Numista (https://en.numista.com). Retrieved on 2022-07-22.
  44. ↑ Catalog of the coins of the Turks and Caicos Islands Numista (https://en.numista.com). Retrieved on 2022-09-03.
  45. ↑ "Money & Cost". lonelyplanet.com. Archived from the original on 16 April 2014. Retrieved 13 December 2013.
  46. ↑ Pilling, David; Peel, Michael (28 July 2014). "Cambodia: Wave of discontent". Financial Times . Archived from the original on 10 December 2022. Retrieved 11 January 2017. Dollars account for 90 per cent of money in Cambodia's banking system and almost the same proportion of cash used in everyday transactions, according to official estimates.
  47. ↑ Kharpal, Arjun (9 June 2021). "El Salvador becomes first country to adopt bitcoin as legal tender after passing law". CNBC. Retrieved 9 June 2021.
  48. ↑ Carter, Chris (8 May 2013). "Economy: The effect of dollarisation in Honduras". Pulsamerica. Archived from the original on 13 January 2017. Retrieved 11 January 2017.
  49. ↑ Pinon, Marco; Gelos, Gaston (28 August 2008). "Uruguay's Monetary Policy Effective Despite Dollarization". IMF Survey Magazine. Retrieved 4 March 2012.
  50. ↑ Zerpa, Fabiola (5 November 2019). "Venezuela Is Now More Than 50% Dollarized, Study Finds". Bloomberg. Retrieved 9 November 2019.
  51. ↑ "Maduro says 'thank God' for dollarization in Venezuela". Reuters . 17 November 2019. Retrieved 18 November 2019.
  52. ↑ Catalog of the coins of Artsakh Numista (https://en.numista.com). Retrieved on 2022-11-06.
  53. ↑ Catalog of the banknotes of Artsakh Numista (https://en.numista.com). Retrieved on 2022-11-06.
  54. ↑ Catalog of the coins of Abkhazia Numista (https://en.numista.com). Retrieved on 2022-10-14.
  55. ↑ Catalog of the coins of South Ossetia Numista (https://en.numista.com). Retrieved on 2022-10-14.

Works cited

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