Sao Tome and Principe: Bank of Portugal supports request to link São Tome currency to the euro

8 October 2008

Lisbon, Portugal, 8 Oct – The Bank of Portugal is supporting Sao Tome and Principe in its project to link its national currency, the dobra, to the euro, the governor of the Bank of Sao Tome and Principe, Luís de Sousa said Tuesday in Lisbon.

Speaking to Portuguese news agency Lusa, de Sousa said that the Portuguese and Sao Tome working teams had been created and over the next few months would start working on compiling and creating convergence indicators that need to be fulfilled, “in the medium term” by the archipelago.

The aim, he said, was for Portugal to be able to “negotiate with the European Union” for a link similar to that that exists between the euro and the Cape Verdean escudo.

Foreign debt, budget and tax deficits as percentages of Gross Domestic Product (GDP) are some of the indicators for which the two sides will draw up targets that Sao Tome and Principe will have to achieve for the agreement to become a reality.

The link, “will give Sao Tome a certain confidence from the European Union in terms of credibility and stability,” boosting the “production and services sector,” he said on the sidelines of the 18th Lisbon Meeting with the delegations of the Portuguese-speaking African Countries (PALOP) and East Timor to the Board of Director of the IMF and the World Bank, promoted by the Bank of Portugal.

De Sousa noted that the aim was to “keep the dobra as a currency,” as well as the monetary authority, “but to have an agreement to guarantee currency exchange.” (macauhub)