News Brief No. 00/14

News Brief: IMF, World Bank, IDB, and CAF Prepared to Support Ecuador

March 9, 2000

The managements of the International Monetary Fund (IMF), the World Bank Group, the Inter-American Development Bank (IDB), and the Corporación Andina de Fomento (CAF) announced today their intention to propose to their Executive Boards a support package of US$2 billion, which would be made available over the next three years to support the Government of Ecuador's ambitious program of economic and structural reform.

The proposed package comprises a stand-by arrangement of US$300 million from the IMF that is expected to be presented to the IMF's Executive Board within a month, and that would be disbursed during the next 12 months. In addition, the proposed package consists of new loans totaling US$425 million from the World Bank Group, US$620 million from the IDB, and US$700 million from CAF.

If approved by the Executive Boards of the institutions, US$900 million will be available to Ecuador in the next 12 months.

The loans are a combination of balance of payments support and investment lending with a strong social content. They are intended to assist the implementation of dollarization, the resolution of the banking crisis, and to strengthen the public finances, including Ecuador's social safety net to minimize the impact on the poor of the nation's difficult economic situation.

Disbursements this year are likely to begin within a month, by which time the Ecuadoran Congress is expected to have approved complementary measures necessary to implement Ecuador's reform program.