2 ms·
> The downside of using the USD as a local currency is that the local central bank cannot set its own lending rates Salvadoran here After dollarization happen
by el-salvador 4y ago
> The downside of using the USD as a local currency is that the local central bank cannot set its own lending rates
Salvadoran here
After dollarization happened in 2001, all loan interest rates went down. My parents paid their mortgage in a shorter time because of that.
- el-salvador 4y agoIt was less risky for the banks to lend in USD than in Salvadoran Colones. So lower interest rates. That was true even when the Salvadoran Colon was stable for most of its history. It's been very close to 8.75 for the past 30 years.