Ecuador will receive $ 643 million from the International Monetary Fund (IMF) to face the health crisis due to covid-19 . The agency acknowledged that the country will require additional support from other external partners to close the remaining financing gap and ease budget constraints.
Yesterday, May 1, 2020, the multilateral approved to grant the country its emergency financial assistance under the Rapid Financing Instrument (RFI). According to the Ministry of Economy and Finance, the credit is freely available and under favorable conditions: 1.05% interest, a five-year term and a three-year grace period.
According to a statement from the multilateral, at the end of the Executive Board discussion in which the disbursement was approved, Kristalina Georgieva, managing director and acting president of the IMF , said that the pandemic has had a devastating impact in Ecuador, to which is added the reduction of oil prices and a sharp drop in the country’s export demand.
I highlight that the Ecuadorian authorities have taken important measures to mitigate the socio – economic consequences of the crisis, in particular proactive measures to contain the spread of the virus and accommodate the necessary resources for the health sector.
“Protecting the most vulnerable and strengthening the social safety net are central government priorities at the time of this health crisis. Efforts are underway to expand social assistance to protect the most vulnerable, while continuing to strengthen the framework for such assistance, ”said Georgieva.
He also referred to the country’s commitment to face risks to the sustainability of public finances and debt. “To ensure debt sustainability , the authorities aim to quickly reach a comprehensive debt restructuring agreement with private creditors, seek sustained and ambitious , but realistic fiscal consolidation in the medium term, while ensuring additional relief from the medium-term debt and financing on favorable terms from official bilateral creditors and other interested parties, ”explained the IMF representative.
It also considers that the reform of the proposals to the Organic Code of Planning and Public Finance will help to strengthen the control, reporting and transparency of public finances . “Transparent disclosure and auditing of covid-19-related expenditures will help safeguard the resources committed to fighting the pandemic,” he said. (I)