Steve Hanke Urges Venezuela to Adopt U.S. Dollar

Professor of applied economics Steve Hanke is advocating for Venezuela to fully adopt the U.S. dollar to combat a 400% inflation rate. Serving as a special advisor to the National Assembly of Venezuela, Hanke proposes the complete abandonment of the bolivar and the central bank to stop government money printing, which he identifies as the primary driver of rising prices.

Hanke estimates a 50% to 80% probability that official dollarization will be approved. He notes that spontaneous dollarization is already occurring among non-government consumers because the bolivar has declined by 78% over the past year.

According to Hanke, an official switch to the dollar would enable Venezuela to pay $250 billion in national debt and attract foreign investment into the oil sector. He predicts these measures would shift the country from negative to positive economic growth by next year.