13401: chamberlain: Rumor of state action hits Haitian dollar accounts (fwd)

[Bob Corbett <corbetre@webster.edu>]

From: Greg Chamberlain <GregChamberlain@compuserve.com>

     By Michael Deibert

     PORT-AU-PRINCE, Haiti,  Oct 15 (Reuters) - A rumor that Haiti's
cash-strapped government planned to convert U.S. dollar-denominated bank
accounts into local currency at an unfavorable rate led worried depositors
to withdraw $20 million in the last three days, a banking official said on
Tuesday.
     The government of President Jean-Bertrand Aristide has denied the
rumor.
     Gladys Coupet, president of the Associate of Professional Banks,
sought to play down the significance of the withdrawals over the last three
days, which she said were chiefly by business and nongovernmental
organizations, as well as private depositors.
     "We have total deposits of $470 million, and only $20 million has been
withdrawn," Coupet told private Radio Metropole. "We had a meeting between
the Central Bank, private banks and the minister of finance yesterday, and
we are assured that confidence will return."
     The rumor, which began spreading through the capital of the
impoverished Caribbean nation late last week, said the government intended
to buy up all accounts held in U.S. dollar denominations in Haitian banks.
     The accounts were then supposedly to be converted to the Haitian
currency, the gourde, and returned to depositors at an exchange rate of 15
gourdes to the dollar, far lower than the standard exchange rate, which has
been around 30 gourdes to the dollar for months. The government denied it
has such plans.
     "We have never even discussed this subject in the government," Finance
Minister Gustave Faubert told local media on Monday.
     The rumor and account withdrawals further undermined public confidence
in the government's economic policies.
     During the summer, a pyramid scheme that had attracted investors with
inflated promises of big revenues on deposits, collapsed. That wiped out
the savings of thousands of poor and middle class Haitians virtually
overnight.
     Aristide began his second term as president in January 2001 but has
been locked in a two-year dispute with the Democratic Convergence
opposition coalition over May 2000 legislative elections.
     Aristide opponents say the election results were biased to favor
Aristide's Lavalas Family party and the deadlock has stalled more than $500
million in international aid to the poorest country in the Americas.