• Articles,  Dollarization of International Finance

    Dollarization of International Finance

    By  Praveen Sharma Introduction Dollarization is when, alongside or in lieu of its domestic currency, a nation starts to accept the US dollar as a medium of exchange or legal tender. It is the term for when the U.S. dollar is used in addition to or instead of the domestic currency of another country. In developed nations with a weak central monetary authority or an uncertain economic climate, dollarization typically occurs. It can happen as an official monetary policy or as a process of the de facto market. The primary reason for dollarization is to reap the benefits of greater currency value stability over the domestic currency of a nation.…