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Monday, July 28, 2008

Ecuador Central Bank President Robert Andrade Resigns

By Stephan Kueffner

July 23 (Bloomberg) -- Ecuador's Central Bank President Robert Andrade stepped down after less than six months in office in the latest sign that the institution will lose its independence under President Rafael Correa.

The Constitutional Assembly, within which Correa has a majority, announced the resignation in a statement without saying why Andrade, a 31-year-old economist and former assistant to Correa, decided to quit.

``It's a change that will help make the bank absolutely subordinate to the administration,'' said Jaime Carrera, head of the Quito-based Fiscal Policy Observatory, a research institute.

The leadership change comes as the assembly is rewriting the nation's constitution and plans to strip the central bank of its autonomy. Under the latest draft, monetary, foreign exchange, and lending policy is put in the hands of the executive branch.

The central bank was already shorn of control over monetary policy when Ecuador adopted the U.S. dollar as its official currency in 2000. It currently manages Ecuador's dollar reserves, issues coinage, sets maximum interest rates for some lenders and publishes some economic statistics.

The replacement for Andrade will come from the central bank's five-member board, which will pick a president from among themselves. The assembly named former Agriculture Minister Carlos Vallejo, who resigned from Correa's Cabinet in January, to join the board.

While reasons for Andrade's resignation aren't clear, Vallejo will likely replace Andrade, said Carrera. ``He hasn't in the past shown himself as a likely supporter of central bank independence,'' he said.

Andrade took over as central bank president March 6.

Central Bank spokeswoman Nancy Ortiz didn't respond to Bloomberg News messages left on her mobile phone seeking comment.

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