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Definition of 'Dollarization'
A situation where the citizens of a country officially or unofficially use a foreign country's currency as legal tender for conducting transactions. The main reason for dollarization is because of greater stability in the value of the foreign currency over domestic currency. The downside of dollarization is that the country gives up its right to influence its own monetary policy by adjusting the money supply.
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Investopedia explains 'Dollarization'
For example, the citizens of a country with an economy undergoing rampant inflation may choose to use a historically stable currency (like the U.S. dollar) to conduct day-to-day transactions, because inflation will cause their domestic currency to have reduced buying power in a relatively short amount of time. Dollarization does not always involve the U.S. dollar as the adopted foreign currency. The euro has also been adopted by non-EU members as its domestic currency.
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Search results for 'Dollarization'
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http://www.investopedia.com/articles/04/082504.asp
Dollarization Explained. November 07 2010 | Filed Under ยป Banking ... as the euro).
This is known as full dollarization. How Pegging Works ...
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http://www.investopedia.com/articles/07/unofficial_dollarization.asp
... While official dollarization may be well-documented, the murky world of
unofficial dollarization is not. Read on to learn more about ...
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http://www.investopedia.com/university/forexmarket/forex4.asp
... Dollarization This event occurs when a country decides not to issue its own currency
and adopts a foreign currency as its national currency. ...
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http://www.investopedia.com/articles/forex/11/popular-currencies-and-why-theyre-traded.asp
... to the US dollar's global acceptance, it is used by some countries as an official
currency, as opposed to a local currency, a practice known as dollarization. ...
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http://www.investopedia.com/articles/basics/06/alookback.asp
... (For more insight, see Dollarization Explained and What Is the International Monetary
Fund?) Furthermore, despite the clear success of the US markets since 1900 ...
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