IMF approves $6.5-billion Ecuador loan to fight virus downturn

The International Monetary Fund (IMF) on Wednesday, September 30, said it had approved a $6.5-billion loan for Ecuador to help the country deal with the shock of the COVID-19 crisis.

The Washington-based lender’s executive board said it would immediately disburse $2 billion for budget support as part of a 27-month arrangement through an Extended Fund Facility.

“The program aims to protect lives and livelihoods in the wake of the COVID-19 pandemic and continue to support efforts to stabilize the economy,” the IMF said in a statement.

The IMF and Quito reached an agreement on the loan in late August to complement a $643-million emergency loan it provided in May.

The funding is meant to expand coverage of social assistance programs, ensure fiscal and debt sustainability, and strengthen domestic institutions, the statement said.

Ecuador has been hard hit by the pandemic, as well as a fall in the price of oil, its main export. The economy was already in recession at the turn of the year and contracted 2.3% in January-March before shrinking more than 12% in the 2nd quarter.

The government of President Lenin Moreno in late July reached an agreement on $17.4 billion in debt that reduced the South American nation’s capital and interest payments.

Ecuador has registered more than 135,000 cases of the coronavirus, including 11,355 deaths, according to a tally by Agence France-Presse. – Rappler.com