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E Timor to adopt US dollar as official currency

DILI: East Timor will adopt the U.S. dollar as its official currency under United Nations rule, a senior member of the National Council for Timorese Resistance (CNRT) told Reuters on Monday.

The decision -- to be officially announced late on Monday -- has angered the CNRT, the main political organisation representing the Timorese, which lobbied strongly for the Portuguese escudo.

"We believe the national currency should be an affirmation of independence and sovereignty," said the CNRT source, who declined to be named.

"Having the U.S. dollar as legal tender will make our dream of adopting the escudo just a dream."

The United Nations declined to comment on Monday.

The escudo has great sentimental value for East Timorese who lived under Portuguese rule.

Indonesia invaded East Timor in 1975, shortly after Lisbon cut loose its colony, but Portugal's opposition to Indonesia's often brutal rule won it the respect of many Timorese.

The currency decision was reached by the 15-member National Consultative Council (NCC), a body established by the U.N. in December to involve East Timorese in decisions that affect the future of the country.

East Timor is currently being run by the United Nations as an interim authority prior to full independence, as promised in the August ballot in which the Timorese voted overwhelmingly to split from Indonesia.

The U.S. dollar will be the official currency while East Timor remains under U.N. administration, most likely for another two to three years. The government of a fully independent East Timor could choose to adopt another currency.

The Indonesian rupiah remains the most widely used currency in the territory, followed by Australian and U.S. dollars.-Reuters