History
The Ecuadorian peso was renamed the sucre on March 22, 1884, and firmly placed on the silver standard. The sucre was defined as 22.5 g fine silver (equivalent to 5 francs of the Latin Monetary Union). Substandard coins were withdrawn between 1887 and 1892, only high-quality silver remaining in circulation.
The fall in the international price of silver accelerated in the 1890s, and on November 3, 1898, Ecuador switched to the gold standard, with the sucre defined as 732.224 mg fine gold (equivalent to 2 shillings sterling).
Like so many other currencies, the sucre became inconvertible shortly after World War I began in 1914. The exchange rate kept falling, despite extensive measures to support it. It was finally stabilized during 1926, and on March 4, 1927 Ecuador went on the gold exchange standard, with the sucre equal to 300.933 mg fine gold or US$0.20 (a devaluation of 58.8%).
The gold exchange standard was suspended February 8, 1932. Exchange controls were adopted April 30 and the official rate was fixed at 5.95 (buying) per U.S. dollar. After the price of silver rose above the nominal value of most silver coins in the 1930s, Ecuador embargoed the export of silver (May 17, 1935). This was followed by numerous adjustments to the foreign exchange system as the sucre continued to depreciate. Foreign exchange controls were finally lifted in September 1937 and the official rate was set at 13.5 sucre per U.S. dollar. The sucre was devalued to 14.77 sucre per dollar on June 4, 1940 and exchange controls were reimposed. The official rate became 14 in 1942 and 13.5 in 1944.
Parity was registered with the International Monetary Fund on December 18, 1946 at 65.827 mg fine gold (13.5 per US$), but a system of multiple exchange rates was adopted in 1947. The sucre's IMF par was devalued to 15 sucre per dollar in 1950, to 18 in 1961, and to 25 in 1970.
The sucre maintained a fairly stable exchange rate against the U.S. dollar until 1983, when it was devalued to 42 per dollar and a crawling peg was adopted. Depreciation gained momentum and the free market rate was over 800 per dollar by 1990 and almost 3000 in 1995.
The sucre lost 67% of its foreign exchange value during 1999, then in one week nosedived 17%, ending at 25,000 sucre = 1 U.S. dollar on January 7, 2000. On January 9, President Jamil Mahuad announced that the US dollar would be adopted as Ecuador's official currency. The US dollar became legal tender in Ecuador March 13, 2000, and sucre notes ceased being legal tender on September 11. Sucre notes remained exchangeable at Banco Central until March 30, 2001, at 25,000 sucres per dollar.
Read more about this topic: Ecuadorian Sucre
Famous quotes containing the word history:
“When the landscape buckles and jerks around, when a dust column of debris rises from the collapse of a block of buildings on bodies that could have been your own, when the staves of history fall awry and the barrel of time bursts apart, some turn to prayer, some to poetry: words in the memory, a stained book carried close to the body, the notebook scribbled by hand—a center of gravity.”
—Adrienne Rich (b. 1929)
“Three million of such stones would be needed before the work was done. Three million stones of an average weight of 5,000 pounds, every stone cut precisely to fit into its destined place in the great pyramid. From the quarries they pulled the stones across the desert to the banks of the Nile. Never in the history of the world had so great a task been performed. Their faith gave them strength, and their joy gave them song.”
—William Faulkner (1897–1962)
“My good friends, this is the second time in our history that there has come back from Germany to Downing Street peace with honour. I believe it is peace for our time. We thank you from the bottom of our hearts. And now I recommend you to go home and sleep quietly in your beds.”
—Neville Chamberlain (1869–1940)