Ecuador closes new deal with IMF and should receive US$1.5 billion this year

RIO DE JANEIRO, BRAZIL – Some US$800 billion should be released to Ecuador in the coming weeks and the other US$700 billion by December, pending further IMF review, according to Finance Minister Simón Cueva.

Cueva would not provide details on the negotiation, arguing that the
agreement still needs to be passed by the IMF board, something that should
happen by the end of September.

The IMF agreement also unblocks Ecuador’s negotiations with other international organizations such as the World Bank and the Andean Development Cooperation, according to the Minister.

“These agreements should amount to US$4.5 billion in support to the country, to be disbursed in the remainder of this year and mid next year, enabling a more favorable security and solvency environment for us,” Cueva said at a press conference.

Last year, ex-president Lenín Moreno closed a US$6.5 billion package with the IMF to salvage an economy that was in crisis even before the Covid-19 pandemic.

Cueva today said that he is negotiating with the IMF the feasibility of redirecting the current aid program to align it with Guilhermo Lasso’s government goals, who took office as president in May this year.

According to the Minister, the government is also preparing a fiscal reform. The bill would not affect the poorest strata of the country and would seek to tax higher income individuals more heavily.

In a statement, the IMF said that Ecuador’s fiscal results are better than expected when the agreement with the previous government was first revised.

“Increased revenues, cost containment and higher-than-expected oil prices have contributed to this result,” the organization said in the statement.