IMF Executive Board Approves US$643 Million in Emergency Assistance to Ecuador to Address the COVID-19 Pandemic
IMF News, May 2, 2020
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Bibliographic details
- Published: May 2, 2020
Summary of approval
- The IMF approved Ecuador’s request for emergency financial assistance under the Rapid Financing Instrument (RFI) equivalent to SDR 469.7 million (about US$643 million, or 67.3 percent of quota).
- Approval date: May 2, 2020. Press Release No. 20/203.
Purpose and intended use of the RFI
- Support urgent balance of payment needs stemming from the outbreak of COVID-19.
- Support the country’s most affected sectors, including:
- the healthcare system
- social protection
- Help finance health and social assistance spending and catalyze financing from other multilateral financial institutions.
Context and economic impact
- The pandemic and the sharp fall in oil prices have posed a major challenge to the Ecuadorian economy and generated important financing constraints.
- Ecuador is one of the largest oil exporters in Latin America, increasing vulnerability to plummeting oil prices and a sharp drop in global demand.
- Authorities have taken decisive policy actions to:
- contain the spread of the virus
- mitigate the socio-economic impact on households and firms
- prioritize efforts to protect the poor and vulnerable
Managing Director Kristalina Georgieva — key statements
- “The COVID-19 pandemic has had a devastating impact in Ecuador, along with plummeting oil prices and a sharp drop in global demand. The authorities have taken bold policy steps to mitigate the socio-economic fallout from the crisis, notably proactive measures to contain the spread of the virus and to accommodate the needed health-related spending.”
- “Protecting the poor and strengthening the social safety net are central priorities of the government at the time of this healthcare crisis. Efforts are underway to increase social assistance to protect the most vulnerable, while continuing to strengthen the framework for such assistance.”
- On fiscal and debt sustainability:
- Authorities are committed to addressing risks to fiscal and debt sustainability.
- Initial substantive steps include engaging with private sector creditors on a debt operation.
- To ensure debt sustainability, the authorities aim to:
- reach expeditiously a comprehensive debt restructuring agreement with private creditors
- pursue a sustained and ambitious, yet realistic, fiscal consolidation over the medium-term
- secure additional medium-term debt relief and financing on favorable terms from official bilateral creditors and other stakeholders
- On transparency and public finance management:
- Amendments to the Organic Planning and Public Finance Law have been submitted to the Assembly to strengthen control, reporting, and transparency of public finances.
- Transparent disclosure and audit of COVID-related spending will help safeguard the resources committed to fight the pandemic.
- “Additional support from other external partners will be required and critical to close the remaining financing gap and ease budget constraints.”
Key statistics and contact
- Approved amount: SDR 469.7 million (about US$643 million, or 67.3 percent of quota).
- Location and date line: Washington, DC – May 2, 2020.
- Media relations: PRESS OFFICER: Maria Candia Romano. Phone: +1 202 623-7100 Email: MEDIA@IMF.org
IMF Press Release No. 20/203, May 2, 2020.