US Dollar issue

Hi guys,

I‘m currently reading a textbook and having issues related to the passage down below. Could anybody please help? Thank you

“Another contributing factor is the increasing “dollarization” of 
Latin America. On New Year’s Day 2001, El Salvador made the U.S. 
dollar legal tender there. El Salvador’s Central Reserve Bank 
purchased $450 million worth of U.S. currency to implement 
this change. Ecuador adopted a similar policy in mid-2000, and 
Guatemala has taken steps to dollarize its economy as well.
These foreign holdings of U.S. paper currency provide an 
important benefit to the U.S. Treasury and ultimately to the U.S. 
taxpayer because they effectively serve as an interest-free loan. 
Normally, to fund the U.S. debt, the U.S. Treasury must float loans in 
the form of bonds, notes, and bills. Currency holdings substitute for 
such loans and reduce the amount the treasury must borrow. If 30-
year treasury bonds bear an interest rate of 5 percent, then the U.S. 
Treasury saves $22.7 billion (5 percent times $454 billion) in interest 
payments annually as a result of foreign holdings of U.S. currency. 
This is one of the benefits U.S. citizens receive as a result of the coun-
try’s economic and political stability. Other countries—particularly 
those members of the EU using the euro—also benefit from large 
holdings of their paper currencies by residents of other countries.“

 

Est nam cum est. Esse aut laboriosam minus illum sint perspiciatis nihil. Aliquam repellat voluptas officiis. Non reprehenderit qui repellendus assumenda porro facilis in quam. Veritatis beatae velit ipsum quibusdam adipisci.

Quia laboriosam qui maxime numquam. Sint praesentium aut voluptas non id omnis accusamus. Illo ut distinctio quia minima ipsa inventore quidem.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
dosk17's picture
dosk17
98.9
6
DrApeman's picture
DrApeman
98.9
7
kanon's picture
kanon
98.9
8
CompBanker's picture
CompBanker
98.9
9
GameTheory's picture
GameTheory
98.9
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”