"Having a currency is just too expensive"

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"Having a currency is just too expensive"

Manuel Hinds finishes his term as finance minister of El Salvador this month. He is proud of the government's achievements but sees one large piece of unfinished business - getting rid of the national currency.

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What have been the achievements of this government which is reaching the end of its five-year term?

When we came into government the rate of inflation was in double digits. In one year it even reached 22%. The fiscal deficit had been around 4.5% of GDP on average over the previous five years. At the time, exports were lower than remittances as sources of foreign exchange and we had to pay more than $2 billion as part of the cost of the peace agreement.

And yet we managed to open up the economy at the same time that we reduced the fiscal deficit, reduced the rate of inflation, increased exports and honoured all the terms of the peace agreement. We have reduced our external debt as a percentage of GDP from 32% to 24%. The average fiscal deficit is 1.9%. We have maintained the same exchange rate but exports are now two and a half times remittances. The rate of inflation has been 2%, for two and a half years in a row.


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