I know that Argentina, with all of their market woes, was contemplating switching over to the US dollar because of its relative solidness. I know that there are other countries that us the US dollar as their national adopted currency. How many are there, and who are they?
Liberia used to use U.S. currency. I don’t know if they still do.
I understand that U.S. dollars were used to some extent in East Timor after they achieved independence from Indonesia but they also used Indonesian rupiah as well as Australian dollars.
The Guatemalan quetzal used to be pegged to the U.S. dollar so that, IIRC, they were widely accepted there. I don’t know about now.
I am almost certain I have heard of other countries or parts of countries that use U.S. dollars. How about the various Pacific Island states?
I know Panama did, I’m not sure if it still does.
According to the World Almanac, East Timor, Ecuador, the Marshall Islands, Micronesia, and Palau use the American dollar as their currency. Panama’s currency, the Balboa, trades at parity with the dollar, so they must have a currency board to maintain equivalence. As Yeah notes, when that is the case the dollar itself will usually be widely accepted as well.
Is it common for newly independent countries to use another nation’s currency at first? That seems to be the case in some of these nations, and I know that the US itself used the Spanish Peso at first.
The Cayman Islands has the CI dollar pegged at $1.25US, but every store accepts both.
British Virgin Islands use the dollar.
Bermuda had only US$ in circulation when I was there on vacation in the late 80s/early90s.
Cuba uses both the Cuban Peso and the USD.
The Chinese Yuan or Renminbi and the HK$ have been pegged to the USD with very small fluctuations for some years now.
Bermuda has its own dollars, pegged at 1 to 1, but there are many more US dollars in the stores’ tills - at least it looked that way to me. Bermuda coins and bills have nice pictures of a longtail bird.
Probably one of the currencys that the newly minted republic used , they probably would have widely used the british pound as well.
Declan
My wife just happened to stumble across this thread that I started. She started to laugh out loud. I asked her why.
“You ever see those commercials for the Franklin Mint? They always say, ‘New Painted Walking Liberty Coin,’ then the fine print is ‘legal tender in Liberia.’”
Bermuda had their own $1 when I was there in the late '80s- but we had to go to a bank to find some.
Nations pegging their currency to another one are not that rare. It has its problem, OTOH.
Argentina has had its peso pegged to the dollar for years, but during the crisis the national dollar reserves went to hell, so Argentines were afraid the government would devaluate the peso, breaking its promise to pay a dollar for a peso on demand (which had kept the peso stable). As a result, people lost their trust in the peso despite the pegging.
Follow-up:
I think one has to draw a difference between “official” currency and the currency everybody’s happy to accept as payment because the official currency is shit. I guess in many countries whose official currency does not have anything to do with the dollar, dollars are what people want. Russia, for example, had problems with the rouble’s hyperinflation in the first few years after the USSR’s collaps, so Us dollars or Western European currencies were appreciated. I’ve even heard a joke about a Russian parvenu who travelled to America. After his return, his friends ask him what America is like.
Parvenu: “Everything’s just like it’s here. They have the same fast food restaurants we have. They’re even using our dollar as money!”
[sub]OK, lame, but you know what I ean[/sub]
I can assure you Panama uses the US Dollar and nothing else. Never has.
We do call it a “Balboa” though. B/100 is the same as USD100.
Another reason I live there.
You statement is self-contradictory, and wrong.
According to the CIA World Fact Book, the following countries use the US dollar exclusively as their currency:
East Timor
Ecuador
Micronesia, Federated States of
Palau
USA
These territories are affiliated with the other nations, and also use the US dollare exclusively as their currency:
American Samoa
British Virgin Islands
Guam
Marshall Islands
Northern Mariana Islands
Puerto Rico
Turks and Caicos Islands
Virgin Islands
These countries number the US dollar as one of at least two official currencies:
El Salvador
Guatemala
Panama
Hum, I’m surprised no one mentioned Ecuador, which moved to the dollar in 2000. It’s not been an unmixed blessing, as I recall from the Economist.
I have some family living in Panama, and while the Balboa is the official currency, it only comes in coins. If you want to purchase anything that costs more than $1, you either are going to pay with a buttload of coins or you are going to use a dollar. If you take money out of an ATM, you are getting dollars.
You will sometimes find places where the US dollar is the preferred currency regardless of the reality of their nation’s currency. If a nation’s currency is lousy black market items will often be sold for dollars instead of the local currency. In the days of the USSR the exchange rate for the Ruble was artifically set essentially making the Ruble worthless anywhere except in the Soviet Union. As a result many goods and services could be purchased with US dollars instead of rubles (although I think the government frowned on that so you did this at some risk). Many tourists who exchanged their dollars to rubles were surprised to find that no one…including the soviet banks…would exchange their money back to dollars when they left.