Which Currency for East Timor?

Abstract

The temporary United Nations administration in East Timor has decided to use the US dollar as official currency ad interim. This may pre-empt the eventual decision as to the most appropriate currency for the new nation. East Timor would certainly be better off using the US dollar than introducing its own national currency, because of the avoidable dangers and costs countries face if they have their own central banks. But there may be some further advantages in using the Australian dollar rather than the US dollar or other possible candidates such as the yen or the euro. Show more