a country that uses other countrys currency

[silicon]

How does it work when country decides to use the currency of another country? How do they set monetary policy?

 

[Murloc]

I think they just don't set the monetary policy.
Kinda like pegged currencies?

 

[norseamd]

ecuador plans to move from the us dollar to the latin american bloc currency

 

[Zeldak]

Almost like a cuckoo using other birds' nests.

 

[Raghu]

Its not like they have to manage the debt of issuing currency. One less thing to worry about.

 

[tommo123]

but you do have to worry about the strength/weakness of the currency which you have no way to manipulate

 

[Murloc]

but you do have to worry about the strength/weakness of the currency which you have no way to manipulate

yeah mostly it's microstates who are embedded in a far bigger country and are in customs union with it as well, so the policies that are okay for the bigger country are okay for them too.

 

[AViking]

Only seen this in countries that are either microstates, breaking up from a union, or have serious inflationary problems with their own currency. All of these are great reasons to use another currency.

 

[OGOC]

How do they set monetary policy?

They don't. That's partially why the whole Greece, Germany, EU stuff was/is such a mess. UKIP's Nigel Farage will be happy to tell you all about that.

It's similar to why various countries want to get away from U.S. petrol dollars. Because the U.S. has been manipulating its currency, (while hilariously pretending it's not, while being upset that China is manipulating theirs).

By the way, when enough countries get fed up and drop the U.S. dollar, Americans aren't going to enjoy that.

 

[momeNt]

They don't. That's partially why the whole Greece, Germany, EU stuff was/is such a mess. UKIP's Nigel Farage will be happy to tell you all about that.

It's similar to why various countries want to get away from U.S. petrol dollars. Because the U.S. has been manipulating its currency, (while hilariously pretending it's not, while being upset that China is manipulating theirs).

By the way, when enough countries get fed up and drop the U.S. dollar, Americans aren't going to enjoy that.

Well, Iraq tried to sell crude oil in Euros, didn't work out well for him in the end. Suddenly he had WMDs and his treatment of the Kurds 20 years prior was proof that he was going to use them on the world.