A successful first step for the bill to defend dollarization

ECUADOR - In Brief 29 Mar 2021 by Magdalena Barreiro

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After three failed attempts, the Administrative Committee of the National Assembly accepted the bill and passed it to the Economic Commission, from where, if approved in this second stage, it will pass to the plenary session.The new version of the law replaces one Board of Directors with two Boards, one of which will be a Financial Board with five members elected by the National Assembly. This board will be in charge of credit and financial issues. The other board is the Monetary Board, in charge of monetary policy and which will also have five members elected by the Assembly. This board will appoint the General Manager of the CBE. The original constitutional problem was that the constitution states that the Central Bank is an institution that is part of the executive power. This Solomonic decision seems to take care of the problem and is in line with a suggestion made by the IMF. However, how independent it will be from the presidential appetite for RILD funds will depend on the Board members, and they in turn, will represent the political majority in the assembly. In any case, the bill is an important improvement on the current dependence of the Central Bank from presidential decisions based solely on executive decrees.We have only 15 days to go until the second round, and we are already seeing the customary discrepancy in polls, some of which put Arauz in first place while others do the same with Lasso. However, we are more optimistic on the trends that show some stagnation for Arauz, while Lasso's number are slowly climbing. Once again, the number of those who are still undecided remains around 20%, so we are cautiously waiting for this number to decrease before ta...