Emerging Markets Rates and Currencies Handbook

88 Citi | Emerging Markets Currencies Handbook 2021 Citi in EL Salvador Citibank NA El Salvador, was established in 1964. It focuses on clients in key segments of the economy, such as textiles, agri-business and industrials. Citi in El Salvador maintains a network agreement with Banco Cuscatlan and Davivienda (90 Collection points). Citi El Salvador is a leader in Corporate and Investment Banking in the country and is focused on transactional and structured solutions for the largest local companies, subsidiaries of multinational companies, financial institutions and the public sector. The team has strong expertise across Citi’s array of products and key local industries. Market Overview On 1 January 2001, the government in El Salvador gave up control of its monetary policy. It abandoned the fixed exchange rate and “dollarized” the economy. Thus, U.S. Dollars can be used in El Salvador as legal tender. El Salvador’s economy is fully dollarised. The government and the Banco Central de Reserva de El Salvador (the Central Bank) only has limited influence over monetary policy through regulation of the banking system. Interest rates and the money supply are largely set by the market. The economy is directly influenced by the U.S. Federal Reserve Bank and by the stability of the EL Salvador labour force abroad (remittances represent 20% of GDP). Convertibility The currency is fully convertible: El Salvador has been a dollarized economy since January 2001. Therefore FX needs are all related to hard currency, most of which are EUR and CHF spot transactions. EL SALVADOR (USD — U.S. Dollar)