The people of Ecuador are rising up to refound their country as a pluri-national homeland for all. This inspiring movement, with Ecuador's indigenous peoples at its heart, is part of the revolution spreading across the Americas, laying the groundwork for a new, fairer, world. Ecuador Rising aims to bring news and analysis of events unfolding in Ecuador to english speakers.

Saturday, January 17, 2009

Borja Denies Ecuador Planning to Create New Currency

By Stephan Kueffner

Jan. 15 (Bloomberg) -- Ecuador’s Economy Minister Diego Borja denied a report the government has plans to create a new currency that would be used alongside the U.S. dollar.

Quito-based newspaper Hoy reported the central bank is drafting a bill that would allow it to introduce a new currency within three years. Borja called the report “imprecise and absurd.”

“We’re carrying out measures to defend dollarization, not considering any new currency,” Borja said in a phone interview.

Ecuador adopted the dollar in 2000 after its currency, the sucre, tumbled following the country’s default on $6.5 billion of bonds in 1999. Ecuador defaulted again in December, missing a $30.6 million bond interest payment.

President Rafael Correa has criticized dollarization and said that Ecuador was fortunate that market conditions over the past few years marked by high prices of oil, Ecuador’s top export, and remittances from Ecuadoreans living overseas along with the dollar’s weakness against other currencies supported the country’s switch to the U.S. currency.

Under the current market and economic slump, Ecuador will have to take emergency measures to defend dollarization by limiting imports and cutting spending, Correa said to the legislature today on the second anniversary of his inaugural.

Borja added that the government is still going ahead with plans to integrate Ecuador in a South American payments system aimed at reducing dependence on the dollar and foreign exchange volatility by allowing the countries to trade in their own currencies.

To contact the reporter on this story: Stephan Kueffner in Quito at

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