Ecuador Announces Dollarization Program

Ecuadorean President Jamil Mahuad, besieged by massive protests to force his resignation, announced Sunday the dollarization of the poor Andean nation’s economy as a move to fight a deep economic crisis. Mahuad, in a speech broadcast on television, also said all Ecuador’s cabinet ministers had submitted their resignations to allow him greater freedom of maneuver. He said that in the coming days, he would announce which changes, if any, he would make in the cabinet. He added that the government will apply an exchange rate of 25,000 sucres per dollar. He said he had congressional backing for the dollarization but did not say when the measure would take effect. The Central Bank ruled out on Wednesday the possibility of dollarizing the economy. The beleaguered Ecuadorean currency ended Friday at 25,100. It had nose dived 67% through a disastrous 1999.