Jan. 17 (Bloomberg) -- Ecuador has reached an agreement with business leaders to cut imports by $1.5 billion to help defend the South American country’s use of the dollar as legal tender, President Rafael Correa said.

Correa said voluntary import restrictions with private industry were reached after he originally had planned to order as much as $2.1 billion in import cuts.

“We’ve reached a very broad consensus,” Correa said. “Some imports will be limited to 70 percent of last year’s level.”

With crude oil prices plunging about three-quarters from a record $147.27 a barrel in July, Ecuador, the smallest member of OPEC, had a trade deficit of $499.74 million in November and a non-oil trade deficit of $6.9 billion through the end of November, according to the central bank. Unable to print currency, Ecuador risks running out of dollars if it doesn’t reduce money spent on imports, Correa said.

Correa repeated his criticism of dollarization as “a barbarity,” though he said the government won’t consider introducing a new currency to replace the dollar.

After scrapping central bank independence under its new constitution that went into effect last year, Ecuador “is preparing a new central bank law that has nothing to do with exiting from dollarization, introducing another currency, or other foolishness,” Correa added.

The government and importers agreed to work to keep prices stable, limit job losses and fight smuggling, Correa said.

To contact the reporter on this story: Stephan Kueffner in Quito at skueffner@bloomberg.net

Last Updated: January 17, 2009 14:24 EST