Ecuador's President Daniel Noboa has issued Executive Decree No. 565, formally reaffirming the US dollar as the country's sole official means of payment amid a looming presidential election and growing concerns about potential alternatives to the dollarised economy, El Universo reported.

Published on March 18 and issued from the Andean city of Cuenca, the decree explicitly states that the "United States dollar [is] the monetary unit and sole official means of payment in the Republic of Ecuador." Noboa has called on his National Democratic Alliance (ADN) party to propose a constitutional reform to Article 303 that would establish monetary policy as the exclusive domain of the Executive Branch through the Central Bank.

In an interview with Radio W, Noboa explained that the decree aims to "strengthen dollarisation" in response to opposition proposals. "Now there's talk of Ecuador dollars, electronic currency, Ecuadorian-style dollarisation, and what are they trying to do?" the president asked, taking aim at exiled former president Rafael Correa's political movement.

The decree comes ahead of the April 13 presidential runoff between conservative Noboa, seeking a second term, and leftist candidate Luisa González, a Correa protégé of the Citizen Revolution movement, whom some accuse of seeking an alternative to the dollar.

The proposed constitutional reform would mandate that all transactions and financial operations in Ecuador must be denominated in US dollars. It would also explicitly prohibit the Central Bank from issuing "any currency or parallel currency other than the dollar" and from providing direct or indirect financing to public sector institutions.

The decree appears to be a direct response to critical statements made by leftist assemblywoman Paola Cabezas, who recently declared that "dollarisation is necessary, Ecuadorian style," suggesting a modified approach to the long-standing monetary system based on the US dollar.

González has distanced herself from her colleagues' statements, saying they "got tangled up in a topic they obviously don't understand" and insisting her party's plan is not to abandon the dollar.

According to El Universo, Mateo Villalba, former manager of Ecuador's central bank, described the decree as politically motivated and unnecessary, given that dollarisation is already enshrined in law through the Organic Monetary and Financial Code. The move would be aimed at shoring up support for Noboa ahead of the crucial runoff vote, Villalba argued.

Ecuador adopted the US dollar as its official currency in 2000 amid a devastating financial crisis that saw triple-digit inflation and the collapse of several banks. According to Ecuador's central bank, the dollarisation policy has provided a foundation of monetary stability for the country, despite numerous external economic shocks over the past two decades, including oil price volatility and the global financial crisis.