# Dollarization Announced (9 January 2000)

URL: https://allhistories.com/ecuador/timeline/2000-dollarization-announced
Location: Quito, Ecuador
Themes: main-event

On 9 January 2000 the government of Ecuador announced that it would adopt the US dollar as the country's official currency to address the economic crisis. Another Wikipedia article places the announcement in the final days of 1999, a conflict between pages. The dollar has been the sole official currency since 2000, and the switch from sucres to dollars was completed in 2001. The decision followed the banking collapse, a deposit freeze in March 1999 and an inflation rate that reached up to 60 percent. The Economy of Ecuador article says GDP contracted by 7.3 percent in 1999 and the national currency lost 65 percent of its value. Dollarization was accompanied by measures agreed with the International Monetary Fund. The announcement set off the protests of the following days. Inflation fell from 96.1 percent in 2000 to 37.7 percent in 2001 and 12.5 percent in 2002, and extreme poverty dropped from about 40 percent in 2001 to 17.4 percent in 2011, a decline Wikipedia credits to stability and emigration. Critics argued that the change hurt lower-income citizens who struggled to convert their sucres, while wealthier people already holding dollar assets benefited. At this point in the timeline (2000), Jamil Mahuad (10 Aug 1998 – 21 Jan 2000) was President of Ecuador, who was both head of state and head of government (Ecuador has no prime minister).

## Why it matters
Dollarization removed Ecuador's own currency, ended hyperinflationary instability and left the country without monetary policy, a framework that has survived every government since.

Ruler at the Time: [Gustavo Noboa](https://allhistories.com/ecuador/rulers/gustavo-noboa-2000)

## Sources
- [Wikipedia — Economy of Ecuador](https://en.wikipedia.org/wiki/Economy_of_Ecuador)
- [Wikipedia — Jamil Mahuad](https://en.wikipedia.org/wiki/Jamil_Mahuad)
- [Wikipedia — History of Ecuador](https://en.wikipedia.org/wiki/History_of_Ecuador)