- Title: ECUADOR: NATIONAL CURRENCY THE 'SUCRE' REPLACED BY THE DOLLAR
- Date: 13th September 2000
- Summary: QUITO, ECUADOR (SEPTEMBER 10 , 2000) (REUTERS) 1. SLV PEOPLE IN PROCESSION DURING MOCK BURIAL AGAINST THE DOLLARIZATION OF THE SUCRE. WOMAN CONDUCTING CEREMONY IS DRESSED AS THE MARSHAL ANTONIO JOSE DE SUCRE WHO DECLARED ECUADOR'S INDEPENDENCE AND WHOSE NAME WAS GIVEN TO THE COUNTRY'S CURRENCY; PEOPLE IN MOCK CEREMONY AND SIGN READING "Hasta la vista baby,
- Embargoed: 28th September 2000 13:00
- Keywords:
- Location: QUITO, ECUADOR
- Country: Ecuador
- Reuters ID: LVAF41KOPSW1YKJJUV8S22HC3MW3
- Story Text: Ecuadoreans have said goodbye to their national
currency, the sucre, many lamenting the loss of a national
symbol and others optimistic that the adoption of the U.S.
dollar would usher in a new period of stability.
Many Ecuadorians who said goodbye to their national
currency, the sucre, officially began to use the dollar
instead on Sunday (September 10) as they praised their
country's dollarization as a way to bolster an economy on the
verge of collapse last year.
On Monday (September 11), thousands of people lined up at
the Andean country's Central Bank in Quito to exchange their
sucres.
"There is too many people, they should have done this
earlier. We are now suffering standing in line and waiting,"
said an unidentified woman.
In spite of the acceptance of the new currency by many
Ecuadorians, others protested the action by holding mock
burials to protest the death of the 116-year-old sucre.
The mock burials were held with a person dressed as
Marshal Antonio Jose de Sucre who liberated Ecuador from the
Spanish "Conquistadores" in 1822 and whose name was used as
that of the Andean country's currency.
Many were unhappy about replacing national heroes on their
currency for the likes of U.S. legends George Washington and
Abraham Lincoln. And polls have also shown that many are
opposed to the measure because they do not understand it.
"This is a nostalgic moment because Ecuador has stopped
being a country. It has lost its currency and its monetary
policy. This is going to affect us in the future. We now don't
realize what that means but in the future when external
problems will come up and we will not know how to act in
regards to the currency and to currency exchange and will have
clashes, that is when difficulties will arise," said Economic
Analyst, Alberto Acosta.
One of the country's largest indigenous groups has called
for a strike to protest dollarization and a series of other
economic reforms.
Only a few new dollar-pegged sucres coins will change
hands with the newly minted pennies, nickels, dimes and
quarters that have slowly flooded the country since April when
the exchange began. Although prices will be officially in
dollars, Ecuadorians will be able to exchange their sucres for
dollars until 09 March. However, all currency transactions
will be conducted only in dollars.
"The legal currency to operate any economic transaction is
the dollar in bills and coins from the United States and those
that have been minted by Ecuador's Central Bank. Both may
circulate in the Ecuadorian economy without any problems.
Every single transaction must be done in the official legal
currency," said the President of Ecuador's Central Bank, Jose
Luis Ycaza.
President Jamil Mahuad announced Ecuador's dollarization
in January following the country's worst economic crisis in
decades. The economy contracted 7.5 percent in 1999, inflation
was Latin America's worst at over 60 percent and the sucre
lost two thirds of its value.
By scrapping the beleaguered sucre for a more-stable
greenback, Mahuad hoped inflation would stabilise and
investment would flow back into the country, kick-starting
the economy and creating jobs for the largely impoverished
nation of 12.4 million people. Mahuad was eventually kicked
out in a coup and replaced by his vice president.
So far, inflation has slowed after an initial jump in
prices and the economy is expected to grow between 0.5 and 1
percent this year. But economists say dollarization is still a
work in progress that must be backed up by a long list of
reforms to guarantee a smooth flow of dollars into the country.
Even other countries with similar monetary systems, like
Argentina, which pegged its peso to the dollar in 1991, have
had a tough time making the measure work.
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