QUITO, Ecuador (Reuters) -- The introduction of the U.S. dollar to replace
                   the much devalued sucre has baffled many Ecuadoreans, who are unsure
                   how much the greenback is worth and are wary of counterfeit notes.

                   "I don't have any idea how to work with the dollar. I think they should have given
                   us instructions on how to do this," said Melba Mero, who sells electronic goods
                   in a street market in Ecuador's Andean capital, Quito.

                   In a desperate attempt to stabilize South America's most rickety economy,
                   Congress passed a law in early March to phase out the sucre, which lost
                   two-thirds of its value last year amid a severe recession. The sucre now trades at
                   25,000 to the dollar, and its rapid devaluation fueled annual inflation rates of 80
                   percent -- the highest rate in Latin America.

                   Under the government plan, the dollar will be the main domestic currency,
                   replacing the surce, which will only remain in circulation for small purchases. As
                   of April 1, Ecuadoreans have found that bank cash machines dispense only
                   greenbacks and not the multicolored sucres -- often filthy and torn.

                   But opinion polls indicate that only one in five Ecuadoreans has ever seen a dollar
                   bill in their life, and 50 percent of the population has no idea what "dollarization"
                   is.

                   The South American country of 12 million people also partially defaulted on
                   public sector extermal debt of $13 billion in 1999.

                   Ecuador's economy is reeling from the ravages of violent storms in 1998,
                   spawned by the freak El Nino weather phenomenon, which tore up roads and
                   bridges and ruined crops. Compounding Ecuador's economic woes was a period
                   of low prices for its key export, oil, while the country staggered under an
                   unsustainable debt burden.

                   To lift the country out of a 7 percent recession in the gross domestic product
                   last year, then President Jamil Mahuad proposed "dollarization." But native
                   Indians, who feared it would push up prices even further, staged massive
                   protests that culminated in a brief military coup in January. Mahuad's
                   congressionally-named successor, President Gustavo Noboa, pushed on with the
                   dollar plan regardless.

                   Ecuadoreans' unfamiliarity with the U.S. currency could lead to a massive influx
                   of counterfeit dollars, say analysts.

                   "Some people already tried to give us fake dollars, and now I have one too. So
                   what do I do? One dollar, 25,000 sucres just thrown away," complained fruit
                   merchant Carmen Casillas.

                   "People just don't know how to recognise fake bills," she added while she
                   carefully arranged the fruit she hoped to sell.

                   At the Ecuador-Colombia border, police arrested a man last week who tried to
                   enter the country with $300,000 in false dollar bills.

                   The Ecuadorean public has also been overwhelmed by the task of mathematically
                   converting dollars to sucres, or vice versa, in everyday business and life. The
                   Ecuadorean government launched a massive information campaign on Monday to
                   familiarize its citizens with the dollar: Television ads have given advice and
                   featured security specialists who explain the dollar to viewers.

                   "I don't understand this dollarization business, so I'm confused as to how I'm
                   going to make money. I don't know what dollarization is going to be like and
                   what they say on television I don't understand," said a woman who asked not to
                   be named.