Ecuadorian parliament approves controversial law now regulating “dollarization”
RIO DE JANEIRO, BRAZIL – The plenary of the National Assembly (Parliament) of Ecuador on Thursday approved with 84 votes in favor of the controversial law in defense of dollarization, criticized by the opposition and awaited by the government as a guarantee to strengthen this currency system adopted by the country in 2000.
With 86 affirmative votes, 41 negative votes, one blank vote and five abstentions, the plenary of the Assembly approved in a second and final debate the draft reform of the Monetary and Financial Code for the defense of dollarization described as urgent in the economic field. Questions.
The Assembly indicated on its website that the approval of the regulation would be sent within the next few hours to the President of the Republic, Lenín Moreno, for approval or veto.
During the debate, which took place on the internet, supporters and opponents of the law warned of the benefits and risks of regulation, the approval of which is tied to the 6.5 credit agreement. billion dollars that the Ecuadorian government signed with the International Monetary Fund. (IMF).
One of the biggest debates has been the return of political and financial autonomy to the Central Bank, which, according to those who defend it, will ensure the stability of the economy and strengthen the country’s financial policy. However, critics consider it a “privatization” of the said institution.
According to a report of the debate, released by the Assembly, proponents of the project stressed that the regulation will improve the structure of the central bank, strengthen dollarization, generate greater liquidity, attract investment and promote transparency in the management of finances. system.
On the other hand, opponents warned of possible unconstitutional biases of the regulation, which opens the possibility of capital flight, and stressed that the stability of dollarization does not depend on the international monetary reserve but on the balance of payments.
Read: Dollarization in Ecuador, a straitjacket that no candidate dares to question
The project aims to “technically regulate the development of the country’s public monetary policy through the Monetary Policy Regulatory Council, which the Central Bank will implement,” which must have “the necessary autonomy,” said the Assembly in its press release.
After hearing about the approval of the law in the Assembly, the Minister of Economy, Mauricio Pozo, expressed his satisfaction with the legislative work and said that the regulation would bring greater stability to the national economy.
The Ecuadorian Assembly “has taken a crucial and fundamental step in defending economic stability and dollarization. Thank you for supporting this reform. The country wins with the approval of this law. A triumph that will benefit the present and the future. We move forward! Pozo wrote on his Twitter account.
Dollarization [the adoption of the U.S. dollar as the national currency] was approved in Ecuador in 2000, after the deep financial crisis that rocked the country between 1998 and 1999 considered the worst in national history, with around thirty private banks intervened by the state and whose rescue cost more of $ 8 billion to the national treasury.