LatinNews Daily - 23 April 2021

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In brief: Ecuador’s parliament approves bill to strengthen dollarisation

* Ecuador’s national assembly has approved a bill intended to strengthen dollarisation in the country. The bill devolves monetary policy from the executive branch to the central bank’s (BCE) committee for the regularisation of monetary policy (JRPM), which will be responsible for establishing monetary policy strictly on technical criteria. Supporters of the initiative, which was backed by the government, say that this will guarantee economic stability and strengthen the dollarised economy by building US dollar reserves and increasing liquidity, as well as attracting investment and increasing transparency in the financial system. Critics have likened the reform to a privatisation of the central bank, arguing that it restricts monetary sovereignty. The JRPM will be subject to oversight by the attorney general’s office, the national assembly, the comptroller, and the presidency. In an adjustment to the bill’s original text, maximum interest rates will be established following concerns that interest rates would be completely liberalised. The bill was approved with 86 votes in favour, 41 against, and seven abstentions, and will now go on to President Lenín Moreno to be sanctioned.

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