Note: This currency has been replaced by the US Dollar.
Overview
The Salvadoran Colón was the official currency of El Salvador. On October 1, 1892 the government of President Carlos Ezeta renamed the Salvadoran Peso the Colón in honor of Christopher Columbus (Cristóbal Colón in Spanish), the discoverer of America. The Colón replaced the Peso at par in 1919. The Colón is subdivided into 100 centavos. It was initially pegged to the US Dollar at the rate of 2 colones = 1 USD.
El Salvador "doolarized" on January 1, 2001, officially replacing the Colón with the USD at a rate of 8.75 Colóns = 1 US Dollar.
Economy
Between 1979 and 1982, El Salvador experienced a 23% drop in real per capita GDP, a 35% decline in export earnings, and a sharp rise in unemployment to an estimated 27%.
In 1986, after a moderate economic recovery in 1984 and 1985, the government adopted a short-term adjustment program to correct remaining internal and external imbalances.
The rate of inflation in El Salvador was determined largely by the conduct of monetary policy and by variations in exchange rates and wages.
Because of a net decline in capital formation and a major devaluation of the colón, inflation doubled during the 1980s, compared to the 1965-80 period.
El Salvador maintained an average annual inflation rate of 14.9 % between 1980 and 1986, compared with 7% per year between 1965 and 1980.
History
The colón was the currency of El Salvador between 1892 and 2001 until it was replaced by the US Dollar.
El Salvador left the gold standard in 1931 and the value of the Colón floated.
On June 19, 1934 the Central Bank was created to be the government body accountable for monetary policy and the sole body authorized to issue currency in the country.
