I thought I read the other day that several poor nations have adopted the US dollar as their currency. Maybe El Salvador was one? Is this true and what are the effects?
Argentina used to accept US currency as tender at an exact one to one rate. I’m not sure how this was affected by the economic crash a couple of years back, but you’d just hand over a few dollars and the change was typically in Argentine Pesos. Very simple. I thought it was a scam at first, that when I went to exchange back that I’d lose, but it was 1:1 in both directions.
The US$ is the official currency of East Timor. Basically because you need to build a nation before you can create a new currency for it.
It’s not only poor nations, but also those whose economy is intrinsically tied in with America’s - Bermuda and the British Virgin Islands are both British territories, but use their own Dollars which are tied 1-1 with the US$. US notes and coins are fully accepted in both.
Panama uses US bank notes, but issues coins identical to the US ones in size and value.
And I will be back there next week! Home for vacation.