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Ecuadors sucre currency opens flat against dollar

QUITO, Ecuador, Jan 12 (Reuters) - Ecuadors sucre currency opened flat against the U.S. dollar Wednesday, with few banks willing to trade the currency after the government announced it was seeking the economy's dollarization.

The sucre opened at 24,980/25,000 to the U.S. dollar after closing Tuesday at 24,850/25,000.

``Banks are already working under the idea that were dollarized. That's why we have a very stable currency and very small margin between buy and sell orders,'' said a currency trader in Quito.

The sucre has been virtually flat all week amid listless trade after President Jamil Mahuad announced Sunday his government would propose the dollarization of the country's crisis-ridden economy.

The move, which must be approved by Congress, would make the U.S. dollar the country's main currency. Only a small fraction of sucres would be left in circulation to use for day-to-day transactions.

Mahuad fixed the changeover rate at 25,000 sucres per dollar.

Dealers said that although interest in sucre trading remained sparse, the market would continue functioning until the law was passed by Congress.

As long as nothing has been signed in Congress, the currency market should continue trading within a very narrow spread, said a currency dealer in Guayaquil.

Mahuad is putting finishing touches to the legislative proposal which he says he will send to Congress this week. He has said that he counts on sufficient support at the unicameral body to pass the measure.

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