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The BBC's Jeremy McDermott
"President Mahuad also said he would tie the sucre to the dollar"
 real 28k

The BBc's Jeremy McDermott
"He has no doubt ordered his cabinet to resign"
 real 28k

Monday, 10 January, 2000, 03:24 GMT
Ecuadorean cabinet out

Quito protest Anti-Mahuad protesters took to the streets of Quito last week

Ecuadorean President Jamil Mahuad, who is facing nationwide protests to force him from office, has announced the resignation of his entire cabinet.

In a nationwide address, President Mahuad said he would give details of his new government within a few days.

To combat a currency which has lost 20% of its value so far this year, the president announced plans to tie Ecuador's sucre to the dollar, saying he had congressional backing for the move.

Ecuador does not need shy measures, but to go to the core of the problems and propose transforming solutions
President Mahuad

"After a two-month analysis I have reached the conclusion that the dollarization system ... is the way out for us and whereby we must proceed," he said.

The exchange rate would be set at 25,000 sucres to the dollar, but President Mahuad did not say when the measure would take effect.

He faces renewed protests later this month, and an indefinite strike from 17 January by the country's powerful oil workers.

State of emergency

A state of emergency has been in force in Ecuador since Thursday, after trades unions and opposition groups began a series of demonstrations aimed at ousting President Mahuad.

President Mahuad Mr Mahuad is under pressure to fix the ailing economy

They blame him for a deepening economic crisis and the collapse of the banking system.

Ecuador - which is struggling through its worst financial crisis since the 1920s - last year saw its economy shrink 7% and inflation top 60%.

President Mahuad, who took office in August 1998, has said repeatedly that he plans to serve out his term, which ends in January 2003.

Army backing

He received a boost on Saturday when the army pledged him its support - settling rumours of a coup.

The armed forces reaffirm that they will fulfill their constitutional duty of defending the rule of law
Army statement

A statement after a seven-hour meeting of senior officers said the army rejected "any attempt to disrupt the rule of law".

It called for a "constitutional and democratic" solution to the country's deepening political and economic crisis.

Political commentators say the president faces other severe tests, with seven provinces voting this month in referendums on greater autonomy, and the ending in March of a moratorium on withdrawing bank deposits.

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See also:
09 Jan 00 |  Americas
Ecuador army backs president
06 Jan 00 |  Americas
Protesters defy state of emergency
12 Jul 99 |  Americas
Ecuador: President bows to strikers
06 Jul 99 |  Americas
State of emergency declared in Ecuador
12 Mar 99 |  Americas
Ecuador faces tough medicine
10 Mar 99 |  Americas
Ecuador protesters clash with police

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