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São Tomé and Príncipe to link local currency to the euro

São Tomé and Príncipe agrees a loan deal with Portugal to link the dobra to the euro, a former ruler. The agreement was intended to tie the dobra to the euro. Portugal will provide as much as 25 million euro in a move endorsed by the European Commission.

São Tomé and Príncipe claimed that linking the dobra to the euro would “guarantee stability” in the country. It is also expected to attract foreign investment.

Officials spent one year putting the accord together, which is expected to begin in January 2010. The agreement follows a similar one which Portugal signed ten years previously with Cape Verde.

The dobra, the currency of São Tomé and Príncipe, was introduced in 1977, replacing the escudo at par.