Salvadoran colón

:Colón is also the name of Costa Rica's currency. For this, see Costa Rican colón.

Currency name in local	colón salvadoreño
Iso code	SVC
Using countries
Subunit ratio 1	1/100
Subunit name 1	centavo
Symbol	₡
Plural	colones
Used coins	5, 10, 25, 50 centavos, 1, 5 colón
Rarely used coins	1, 2, 3 centavos
Used banknotes	1, 2, 5, 10, 25, 50, 100, 200 colones
Issuing authority	Central Reserve Bank of El Salvador
Obsolete notice	Y

The colón was the currency of El Salvador between 1892 and 2001, until it was substituted by the U.S. Dollar. It was subdivided into 100 centavos and its ISO 4217 code was SVC. The plural is colones in Spanish and was named after Christopher Columbus, known as Cristóbal Colón in Spanish.

The symbol for the colón is a c with two slashes. The symbol "₡" has Unicode code point U+20A1, and the decimal representation is 8353. In HTML it can be entered as ₡. The colón sign is not to be confused with the cent sign (¢), which has a code point U+00A2 in Unicode (or 162 in decimal), or with the cedi sign ₵, which has a code point U+20B5 in Unicode (or 8373 in decimal). Nonetheless, the commonly available cent symbol '¢' is frequently used locally to designate the colón in price markings and advertisements.

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History

On October 1 of 1892, the government of President Carlos Ezeta, decided that the Salvadoran peso be called 'Colon', in homage to the "discoverer" of America. The colón replaced the peso at par in 1919. It was initially pegged to the U.S. dollar at a rate of 2 colones = 1 dollar. El Salvador left the gold standard in 1931 and its value floated. On June 19, 1934 the Central Bank was created as the government body responsible for monetary policy and the sole body authorized to issue currency in the nation. On January 1, 2001 under the government of President Francisco Flores, the Law of Monetary Integration went into effect and allowed the free circulation of U.S. dollar in the country (see dollarization), with a fixed exchange rate of 8.75 colones. The colon has not officially ceased to be legal tender.

Post colonial currency

In the mid-nineteenth century, farms produced tin sheets (property sheets) with the farm's name and were used as payment to employees, the sheets only had value in the farm store that issued it, so it created a kind of monopoly. During the existence of the Central American Federation, the monetary system did not change with respect to the colonial system and continued using silver by weight as the main currency with circulation of macaques and property sheets. Once the federation dissolved, the Salvadoran government decreed the issuance of the first national currency, "Reales", gold coins engraved with an "R" and the "Escudos (Shields)" were silver coins with an "E" engraved.

In 1883, under the presidency of Dr. Rafael Zaldívar, the First Monetary Law was adopted using "Peso (weight)" as a monetary unit, discarding the Spanish system of division into 8 reales. The new law served as a basis for the metric system, where the peso was equivalent to 10 reales. At the end of the 19th century, new paper money began to play an important role as an instrument of change as a unit of measure of the value of goods and as an element of savings. The job of issuing bank notes was decreed to private banks licensed by the government. The first bank to issue banknotes was the Banco International (International Bank), founded in 1880, this bank was granted exclusive issuing, but then lost exclusivity to Banco Occidental and Banco Agricola Comercial. Under the presidency of Carloz Ezeta, the Mint was inaugurated on August 28 of 1892. On October 1 of that year as a tribute to Christopher Columbus in the Discovery of America, the Legislature reformed the monetary law and changed the name to "Colón". The exchange rate from US dollar at that time was 2 colones for a dollar.

In 1919 Currency laws were amended stipulating that the coins with daily wear would be withdrawn from circulation and coins with cuts or punched out parts would not be accepted as legal tender. The amendment also prohibited the using of cards, vouchers or counterparts to replace the official currency. Furthermore, it gave the Ministry of Finance the power to control the circulation of the currency.

Despite the relative economic prosperity of the 1920s, the worldwide depression of 1929, the global drop in coffee prices and the government deregulation of the monetary system caused a national economic crisis. The main problem was the lack of a specialized institution dedicated to ensuring that currency retained its value by controlling banking activity. In response, the government of General Maximiliano Hernandez Martinez hired an Englishman named Frederick Francis Joseph Powell to analyze and structure the Salvadoran banking body. In its final report, it was recommended that the banking system should be organized around a central bank to protect the currency and its value, and issue the currency and credit control.

Thus through the presidential initiative on June 19, 1934, the Legislature approved the creation of the Central Bank of El Salvador, an institution whose objectives are set to control the volume of credit and demand of currency, and was also conferred the exclusive power to issue monetary kind.

Coins

Because the colón replaced the peso at par, 1 and 5 centavos coins issued before 1919 continued to be issued without design change after the colón's introduction. In 1921, cupro-nickel 10 centavos were introduced, followed by silver 25 centavos in 1943. In 1953, silver 50 centavos were introduced alongside smaller silver 25 centavos. Both were replaced by nickel coins in 1970. In 1974, nickel-brass 2 and 3 centavos coins were introduced, followed by 1 colón coins in 1984.

Banknotes

On August 31, 1934, the new banking institution put into circulation the first family of banknotes in Salvadoran history. Until 1934, paper money was issued by private banks. Three banks issued notes, the Banco Agricola Comercial, the Banco Occidental and the Banco Salvadoreño. They were issued in one, five, ten, twenty-five and one hundred colones, adding two and fifty colones banknotes in 1955. The last 2 colones notes were dated 1976 and the last 1 colón note was issued in 1982. 200 colones banknotes were introduced in 1997.

{|class="wikitable" style="font-size: 90%" !colspan="7"| Colón Banknotes |- !colspan="2"| Image !!rowspan="2"| Value !!rowspan="2"| Main Color !!colspan="2"| Description !!rowspan="2"|Remark |- ! Obverse !! Reverse !! Obverse !! Reverse |- |align="center" colspan="2"| | ¢1 | Red | Christopher Columbus | Presa 5 de Noviembre | |- |align="center" colspan="2"| | ¢2 | Magenta | Christopher Columbus | Colonial church in Panchimalco | |- |align="center" colspan="2"| | ¢5 | Green | Christopher Columbus | Palacio Nacional | |- |align="center" colspan="2"| | ¢10 | Blue | Christopher Columbus | Volcán de Izalco (Izalco volcano) | |- |align="center" colspan="2"| | ¢25 | Cyan | Christopher Columbus | Pirámide de San Andres | |- |align="center" colspan="2"| | ¢50 | Purple | Christopher Columbus | Lago de Coatepeque | |- |align="center" colspan="2"| | ¢100 | Olive Green | Christopher Columbus | Pirámide del Tazumal | |- |align="center" colspan="2"| | ¢200 | Orange | Christopher Columbus | Monumento al Divino Salvador del Mundo (Monument to the Divine Savior of the World) | |- |colspan="7"| |}

References

Colon Category:Currencies of the Americas