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Friday, May 14, 2010

Ecuador Dollar Use Not Threatened by Iran, Borja Says

By Nathan Gill

May 10 (Bloomberg) -- Ecuador’s relationship with Iran doesn’t threaten the country’s use of the dollar as its official currency, Central Bank President Diego Borja said.

Borja, speaking to reporters today in Quito, said he met with representatives of the U.S. Treasury Department, Federal Reserve and International Monetary Fund last month to dispel concerns about Ecuador’s relationship with Iran. Borja was confirmed as central bank president April 5 after serving as interim chief since December.

Ecuador’s central bank, which was stripped of its autonomy in a constitutional referendum in 2008, signed an accord with Iran in December 2008 to increase trade. Iran agreed to give Ecuador $40 million in credit for small- and medium-sized businesses, according to a March 2009 statement on the website of President Rafael Correa. Borja said today Iran never deposited any funds with the Ecuadorean bank.

“It was perfectly clear to the U.S. Treasury that there was no deposit from Iran and therefore there is no underlying problem” that would affect “the normal flow of dollars to the economy,” Borja said.

Borja said some Ecuadorean companies have been affected by the country’s presence on the Financial Action Task Force money- laundering list. Ecuador was put on the list in February and seeks to be removed, he said.

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