March 16, 2000
El Salvador considers dollarizing economy

                   SAN SALVADOR, El Salvador (AP) -- The government is considering
                   "dollarizing" its economy, Economy Minister Jose Luis Trigueros said
                   Thursday, though he added that it's not rushing toward the greenback.

                   "The government is going to take any measure necessary to maintain this
                   power of acquisition (of the national currency), and one of the alternatives
                   that has always existed is dollarization," he said in an interview with a local
                   television station.

                   That comment appeared to revive a debate began several years ago which
                   had been quiet recently.

                   Trigueros did not give details, such as whether the country might peg its
                   currency, the colon, to the dollar or adopt the U.S. currency outright -- as
                   Panama has done and as Ecuador is doing. The colon has traded at 8.7 to the
                   dollar since February 1994.

                   He also said there is no hurry to dollarize, "since our country has a stable
                   currency," and any move to the dollar would need a broad consensus. "It is an
                   alternative we are studying," he said.

                   Dollarization would help stabilize the economy and make imports and foreign
                   trade easier. But it would limit the government's economic options, increase
                   competition for local producers and might make the country's exports more

                   "Any adjustment at this time would put us in a straitjacket which would impede
                   the export sector from continued growth," said Francisco Escobar, president of
                   the Salvadoran Association of Construction Industries.

                   But Patricio Parras, president of the Salvadoran Construction Industry
                   Chamber, said it would be in line with "the world tendency toward unification
                   of currencies."

                   "Before, when one spoke of dollarization, it seemed as if El Salvador would be
                   a pioneer. But today, internationally, they are talking about the dollarization of
                   the Americas," Parras added.

                    Copyright 2000 The Associated Press.