In December 1999

In December 1999, net international reserves equaled US$1.8 billion or roughly five months of imports. Having this hard currency buffer to work with, the Salvadoran government undertook a monetary integration plan beginning January 1, 2001 by which the U.S. dollar became legal tender alongside the Salvadoran colón and all formal accounting was done in U.S. dollars. This way, the government has formally limited its possibility of implementing open market monetary policies to influence short term variables in the economy. As of September 2007, net international reserves stood at $2.42 billion.[22]

In 2004, the colón stopped circulating and is now never used in the country for any type of transaction.[23]
Cotton field in the Usulután Department

A challenge in El Salvador has been developing new growth sectors for a more diversified economy. In the past the country produced gold and silver.[24] As many other former colonies, for many years El Salvador was considered a mono-export economy (an economy that depended heavily on one type of export). During colonial times, the Spanish decided that El Salvador would produce and export indigo, but after the invention of synthetic dyes in the 19th century, Salvadoran authorities and the newly created modern state turned to coffee as the main export.

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