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What countries have adopted the US dollar as their currency? Please post only one example and...

What countries have adopted the US dollar as their currency? Please post only one example and comment on the current status, the benefits or problems they’ve obtained because of that.

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Answer #1

Zimbawe,Samoa, Ecuador, Palu,etc. Currenly all use US dollar as currency.

Benfits:
1 It protects them against fluctuation of exchange rate as dollar is a very stable currency.
2. Since world exports and imports are done in US dollars exchange risk is minimised to some extent.


Problems:
1The exports are costly and hence there might be current account deficit.
2. The interest rates and inflation of US are transferred to these countries and they are dependent on fluctuations of US dollar.
3. If there is economic shock or recession in US it will easily trickle down to theses countries.

Please Discuss in case of Doubt

Best of Luck. God Bless
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