The Republic of El Salvador is situated in Central America, surrounded by Honduras, Guatemala, and the Pacific Ocean. It lies on the western part of the isthmus, making it the only country in Central America that doesn’t have a Caribbean coastline. Being the Land of Volcanoes, the country experiences frequent earthquakes and volcanic activities.
Although it is the smallest country in the region, this mountainous nation has the third-largest economy in Central America. Its staple products include coffee, corn, rice, beef, and shrimp. In 2006, the country became the first to affirm the Dominican Republic-Central American Free Trade Agreement which has boosted the export of sugar, processed food, and ethanol. In 2009, El Salvador was hit by the global economic crisis that contracted its real GDP by 3.5%. In 2010, it began to recover with the increase in export and remittances.
Before switching to the US dollar, the Salvadoran colon was the official currency of the country, which was made up of 100 centavos. Initially, the currency was called Salvadoran peso but in 1892, it was changed to the colon with the Legislative Assembly under President Carlos Ezeta. The colon was introduced to commemorate the 400th year of the discovery of the Americas and was named after the Italian explorer and navigator Christopher Columbus.
The latest issues of Salvadoran colon banknotes bear a portrait of Columbus on the obverse while the reverse depicts landmarks and Salvadoran heritage. Unlike most Salvadoran notes, these paper bills have no validation overprint on their reverse.
To stabilize the country’s economy, El Salvador changed its official currency to the US dollar through the Monetary Integration Act of 2001, taking away the exclusive power of the Central Reserve Bank to issue money. Because the nation isn’t able to produce its own dollars, El Salvador established an educational program that assists El Salvadorans to learn and understand the new currency. Still, the colon hasn’t been ceased to be a legal tender.