Portuguese escudo front-runner as Timor currency
Portuguese escudo front-runner as Timor currency
DILI, East Timor (Reuters): The Portuguese escudo has
strengthened its position as a contender to become the currency
of an independent East Timor.
Portugal's Banco Nacional Ultramarino this week became the
first bank to open a branch in Dili since the territory was
ravaged by pro-Indonesian militias in the wake of August's vote
for independence.
State-owned Ultramarino's presence as a conduit for pensions
and civil service salaries will make the escudo the most widely
circulated currency after the unpopular Indonesian rupiah.
"The escudo will be very well accepted in East Timor because
it was the currency before the Indonesian invasion and we have
spoken to the people and they said they wanted it," said Rui
Silva, the deputy head of the Commission of Portugal to East
Timor.
The escudo has been widely touted as a possible currency for
East Timor, a former Portuguese colony, and although some East
Timorese leaders have expressed a preference for the currency, no
final decision has been made.
An official of the U.N. Transitional Administration in East
Timor (UNTAET) ruled out keeping the Indonesian rupiah.
"Keeping the rupiah as legal tender is not really an option
because it not a particularly stable currency and the people do
not want it," said David Harland, UNTAET's acting head of
governance and public administration.
"What we will be looking for in a currency is stability and
the degree to which intervention by the state would have a ripple
effect."
Portugal has said that it will pay the salaries of civil
servants for the next few months to help speed East Timor's
transition to independence.
Even before the opening of the Portuguese bank in Dili,
Portugal had also been paying pensions to former members of its
army and other state employees via an Indonesian bank.
An Ultramarino official said most banking services were
available, including foreign currency deposits, but said it would
not be extending loans for the time being.
East Timor has no functioning system of civil law and property
title disputes arising from the territory's tangled history of
abandonment and invasion are already stirring.
Some of the 600 people waiting for their pensions on Tuesday
had other complaints.
"I cannot use my escudo to buy anything so I will take it to
my priest, he would change it," said pensioner Cipriana da Silva.
The escudo is one of four currencies in circulation in East
Timor.
Most daily transactions are carried out in Indonesian rupiah,
but big-ticket items are often priced in Australian or U.S.
dollars.