3 ms·
Governments are never going to adopt a currency controlled by foreign entities.
by shanghaiaway 8y ago
Governments are never going to adopt a currency controlled by foreign entities.
- TomMarius 8y agoReally? In many parts of the world (outside of the US, e.g. Georgia), dollar is used/accepted even for taxes.
- shanghaiaway 8y agoNo country has adopted a foreign currency to make their central bank impotent.
- kirushik 8y agoSeems like at least Ecuador did: > The present currency of Ecuador is the United States dollar. https://en.wikipedia.org/wiki/Currency_of_Ecuador https://en.wikipedia.org/wiki/Currency_of_Ecuador
- pjc50 8y agoSeveral small countries have "dollarised". Ireland for decades ran an "independent" currency that had the same value as the pound and decimalised on the same day.
- Reason077 8y ago"No country has adopted a foreign currency to make their central bank impotent." There are a number of countries who's currencies are pegged to the US dollar at fixed exchange rates. Notably Hong Kong, as well as gulf states such as the UAE, Saudi Arabia, Qatar, etc. This means their central banks have very limited scope to control domestic money supply and interest rates via monetary policy.
- bausshf 8y agoThe US Dollar is an accepted global currency for international trades. So it kinda does make sense they accept it, since they can ultimately use it.
- eumenides1 8y agoYes, but accepting a foreign currency as your defacto currency is IMO insane. US sets monetary policy for the US and the US only. So if US raises interest rates to combat inflation that is occurring in the US. Georgia by default accepts this position regardless of what is actually happening in Georgia. If Georgia has deflation occurring, then this is bad for Georgia. If you want to be a "Big Boy" country, you have to have your own monetary policy and currency. The problem is, managing your monetary policy and currency is really difficult. Countries that experience hyper-inflation are usually ones where monetary policy isn't done right. The other side of it is, when you do have the right monetary policy and currency controls, it allows to survive and possibly thrive in the financial world.
- TomMarius 8y agoGeorgia is trying hard, but Russia isn't making it easy for them.
- shanghaiaway 8y agoWhat does this have to do with anything Nothing