The Los Angeles Post
U.S. World Business Lifestyle
Today: April 09, 2025
Today: April 09, 2025

IMF, Ecuador reach four-year, $4 billion staff-level agreement

FILE PHOTO: The IMF logo is seen outside the headquarters building in Washington
May 10, 2024
Reuters - Reuters

By Rodrigo Campos

(Reuters) -The International Monetary Fund (IMF) and Ecuadorean authorities have reached a staff-level agreement to underpin a four-year, $4 billion extended fund facility (EFF), the IMF said in a statement on Thursday.

"Amid a challenging macroeconomic outlook, our objective has been and remains to support the authorities' efforts to improve the living standards of all Ecuadoreans, with a focus on protecting the most vulnerable and promoting sustainable growth," said IMF mission chief for Ecuador Varapat Chensavasdijai.

The deal is subject to executive board approval, the statement added, without specifying a date for a board discussion.

"The amount is a positive as well as the fact that it is an EFF program," said Shamaila Khan, head of fixed income for Emerging Markets and Asia Pacific at UBS Asset Management.

"Risk is, as with all IMF programs, being able to stick to the policies required," she added, noting that the agreement was already expected in financial markets.

Given the $4 billion is roughly similar to what Ecuador needs to repay the fund in principal over the same time period, meaning no additional fresh cash, Goldman Sachs said they do not expect the program to hinge on a demanding set of requirements.

"Payments to the IMF constitute a significant fraction of external debt repayment obligations," added Goldman economist Sergio Armella in a research note.

"As such, conditional on its approval, the new program should reduce near term financial risks."

Ecuadorean officials had in the past week hinted that a deal with the Washington lender was near, boosting the price of the country's international bonds.

Ecuador bonds had returned over 55% year to date at the index level, and on Thursday spreads to comparable U.S. debt narrowed by 41 basis points to 1,118 bps, on track to end the day at the tightest since February 2023 according to LSEG data.

(Reporting by Julia Symmes Cobb and Rodrigo CamposEditing by Marguerita Choy, Frances Kerry and Sandra Maler)

Related Articles

Record Galapagos debt-for-nature swap scrutinized over transparency irregularities claims 'The climate is crazy' Ecuador minister says as country faces 12-hour power cuts Panama deports Ecuadorean migrants in second US-backed flight Ecuador's citizens voted to stop oil drilling in heart of Amazon. A year later, it hasn't happened
Share This

Popular

Americas|Crime|US|World

Inside the Salvadoran mega-prison where US deportees live

Inside the Salvadoran mega-prison where US deportees live
Americas|Entertainment|World

The roof collapses at a Dominican Republic nightclub, killing at least 79 people

The roof collapses at a Dominican Republic nightclub, killing at least 79 people
Americas|Business|Political|US|World

US to 'take back' Panama Canal from Chinese influence, visiting Pentagon chief says

US to 'take back' Panama Canal from Chinese influence, visiting Pentagon chief says
Americas|Political|US|World

US defense secretary says China is a threat to Panama Canal, spurring a fiery response from Beijing

US defense secretary says China is a threat to Panama Canal, spurring a fiery response from Beijing

Economy

Asia|Business|Economy|Finance|Political|Stock Markets|US

Trump's latest tariffs loom, set to deepen global trade war

Trump's latest tariffs loom, set to deepen global trade war
Asia|Business|Economy|Finance|Stock Markets|Technology|US

Japan's Nikkei falls tracking Wall Street on growth worries

Japan's Nikkei falls tracking Wall Street on growth worries
Economy|Environment|Political|US

Trump issues order to block state climate change policies

Trump issues order to block state climate change policies
Asia|Business|Economy|Finance|Political

Japan rules out using US Treasury holdings to counter Trump tariffs

Japan rules out using US Treasury holdings to counter Trump tariffs

Access this article for free.

Already have an account? Sign In