During the transition both dollars and sucrescirculated as legal tender, at an official exchange rate of 25,000sucres to the dollar. Ecuador joins nine other countries or territories using the U.S.dollar as their official currency, according to the InternationalMonetary Fund. They include Panama, Guam, the Marshall Islands,Micronesia, Palau, Puerto Rico, American Samoa, the British VirginIslands, and the U.S. Virgin Islands. Officials hope the switchover will end record inflation runningat 104 percent a year, Latin America's highest. The step isdesigned to prevent the government from printing excessive money tomeet its budgetary needs.
Economists blame Ecuador's economic woeson decades of deficit spending.
So far, signs indicate the plan is working. Monthly inflationhas plunged from 14.3 percent in January to 1.4 percent in August. Last week, the Central Bank began distributing coins freshlyminted in Canada and Mexico in amounts equivalent to the U.S.penny, the nickel, the dime and the quarter. Ecuador has followedPanama's example in using U.S. bills but minting its own coins. But the new coins, for the most part, are circulating only inlarge cities.