If a monetary treaty can be negotiated, it could be attractive for Latin America. Economists and government officials say the nations that would be most tempted to follow Ecuador's example are those of Central America, which already conduct the bulk of their trade with the United States. In El Salvador, for instance, dollar remittances from Salvadorans in the United States are now the principal source of foreign exchange. In reality, many Latin American nations already rely on dollars, to one degree or another. At the checkout counters of many supermarkets in Peru, for example, the bills given to shoppers are calculated both in dollars and Peruvian soles.
Customers pay in either currency.
Indeed, the consistent popularity of the currency in world markets has meant that most United States dollars can be found in other countries. In a country like Argentina, a lot of the costs of dollarization have already been incurred, so the step to full dollarization would not be that great. But he and several other analysts argue that any relinquishing of autonomy would be offset by increased investment and capital flows and other gains. In other words, the incidence of contagion will diminish. Those who advocate formal adoption of the American dollar argue that it would also benefit countries in which wage-earners are used to seeing their purchasing power eroded by high inflation and a weak currency.