Country Information

 

The Salvadorian colon (SVC) is divided into 100 centavos. While colones are still accepted, the primary currency of El Salvador is the U.S. Dollar (USD). The colon had been produced in 1, 2, 5, 10, 25, 50, 100 and 200 colones, but is no longer being printed in an effort to eventually make the dollar the only currency circulating in El Salvador. Preceding the colon was the peso, which was a decimalized currency, but the colon replaced it in 1892.

Moody's Rating
Baa3
S&P Rating
BB+

Sovereign Ratings for El Salvador

Sovereign credit ratings play an important part in determining a country's access to international capital markets, and the terms of that access. Sovereign ratings help to foster dramatic growth, stability, and efficiency of international and domestic markets.

What does it look like?

Political Structure

The Republic of El Salvador is divided into 14 departments. The government consists of three branches: the executive, the administrative and the judicial. The President and Vice President of the republic, who are elected on the same ticket by popular vote to serve five-year terms, lead the executive branch. The legislature is a unicameral Legislative Assembly that consists of 84 members who are elected by popular vote to serve three-year terms. The judiciary is the Supreme Court, whose members are selected by the Legislative Assembly.

Prominent Figures

The President of El Salvador is Antonio Saca, who was elected in March 2004 and will serve his current term until 2009. The central bank of El Salvador is Banco Central de Reserva de El Salvador; the bank is run by a directive board led by the President of the bank, Luz Maria S. de Potillo.

Unique Characteristics

El Salvador's major export is coffee. The decline in coffee prices in the late 1990s due to a worldwide surplus of coffee translated into a significant drop in the income generated by coffee production in the country. From 1999-2001, El Salvador lost an average of $138 million per year in coffee revenue. In addition to the surplus, earthquakes in 2001 cost the nation $600 million in coffee production.

From 1979 until 1990, El Salvador suffered from civil war that ultimately resulted in $2.2 billion in damages to infrastructure and means of production.

Key Economic Factors

Since adopting the U.S. Dollar as its official currency, El Salvador no longer has control over monetary policy and has shifted all of its attention to maintaining a disciplined fiscal policy. The economy has been offset by a GDP per capital that totals only about half of the GDPs of Brazil, Argentina and Chile, as well as an extremely unequal distribution of wealth. Citizens living abroad and external aid have offset the trade deficit by almost $2 billion annually. In an effort to improve their economic struggles, the government has attempted to open new export markets, encourage foreign investment, and modernize the tax and healthcare systems.

The government of El Salvador views foreign investment as crucial for economic growth and development, and has taken numerous steps in recent years to improve the investment climate. Most directly, the government has enacted new laws and amended existing ones to encourage foreign direct and portfolio investment. Next, it has announced a medium-term objective to become a logistics/shipping hub for Central America, and it recognizes that doing so will require significant foreign investment. Additionally, the government ratified a free trade agreement (CAFTA-DR) among Central American countries, the Dominican Republic, and the United States, that includes an investment chapter and other chapters that, when implemented, will strengthen the investment climate in El Salvador.

Earthquakes during 2003 resulted in a 1.8% decrease in growth. Costs of rebuilding in the aftermath of the earthquakes amounted to 3.7% of the GDP.

Exchange Rates

USD
AUD
CAD
EUR
JPY
GBP
1 USD
=
11.3421.2920.899102.8460.734
1 AUD
=
0.74510.9620.6776.6170.547
1 CAD
=
0.7741.03910.69679.6260.568
1 EUR
=
1.1121.4931.4371114.390.817
1 JPY
=
0.010.0130.0130.00910.007
1 GBP
=
1.3621.8281.7591.225140.0721

Travel

FLIGHTS from WASHINGTON to EL SALVADOR Price
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$2,519
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$182
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$174
Albuquerque Starting from
$264
Alexandria Internation Starting from
$450
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