13439: Medard: millions of dollars withdrawn amid conversion rumors (fwd)

[Bob Corbett <corbetre@webster.edu>]

From: A M <famfriends@hotmail.com>

Posted on Thu, Oct. 17, 2002
Miami Herald (online)
http://www.miami.com/mld/miamiherald/news/world/haiti/4301816.htm

Haitians take out millions of dollars from banks amid conversion rumors
BY MICHAEL NORTON
Associated Press

PORT-AU-PRINCE -- Haitians hastily withdrew millions of U.S. dollars from
banks this week following rumors that the government planned to convert
account balances into Haitian gourdes at lower-than-market rate, officials
said Wednesday.

The rumors that started last week have continued to circulate despite the
government's repeated assurance they are false.

Economists estimated depositors had taken out about $20 million (600 million
gourdes) by Wednesday, when the withdrawals appeared to slow down.

Nevertheless, economists doubted the U.S. dollars would return, which caused
concern over possible inflation.

''The flight of capital is a reality, and the dollars are unlikely to return
to Haiti when the panic subsides'' because many have lost faith in the
government, Haitian economist Claude Beauboeuf said.

Already, the Haitian gourde has lost about 28 percent of its value in the
past year. On Wednesday, the exchange rate was 32 gourdes to the dollar,
compared to 25 gourdes a year ago.

Government officials have denied the rumors it plans to convert some $460
million currently in dollar accounts to gourdes, saying such a move would
have dire consequences for investment.

President Jean-Bertrand Aristide denounced the rumor Tuesday as an attempt
''to destabilize the already-sick economy'' and scare off potential
investors.

''The economic war is linked to a psychological war'' that aims at
tarnishing Haiti's image, he said.

One of the Western Hemisphere's poorest countries, Haiti has been in a
political crisis since May 2000 elections, which observers said were flawed.

The government and opposition remain in a stalemate.

The international community has blocked hundreds of millions of dollars in
foreign aid until the government establishes a peaceful environment for new
elections.

Central bank officials could not say Wednesday exactly how much hard
currency had been taken out from Haiti's 12 commercial banks.

''Several million'' had been withdrawn by Tuesday from Haiti's largest bank,
Sogebank, Jean-Marie Boisson, the bank's chief economist, said on
independent Radio Metropole.



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