Thus, these measures cannot eliminate the effects of the financial market turmoil that have the potential to lower aggregate spending and cause a contraction in economic activity.
On the real side, the small size of an economy and a high degree of openness combined with predominant trade and financial links to the country issuing the anchor currency are factors in favour of the adoption of a foreign currency. On the monetary side, a history of high inflation and a high level of currency substitution, i.e.