Questions and Answers on Ecuador

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Publication date: March 23, 2020.
Ecuador faces compounded economic challenges from the Covid-19 outbreak and the sharp fall in oil prices.
Ecuador is identified as "one the largest oil exporters in Latin America."

The authorities requested financial assistance under the Fund’s Rapid Financing Instrument (RFI).
Purpose of RFI financing:
- Address urgent balance of payments needs.
- Support policies to direct funds swiftly to Ecuador’s most affected sectors, including the healthcare system and social protection.
- Implement policies to address emergencies such as Covid-19 and the sharp decline in oil prices.
Countries are not obliged to use RFI financing exclusively on the health sector, but it is generally understood that countries will need to boost spending on health and social protection to combat the virus and protect vulnerable groups.

Subject to Executive Board approval, Ecuador could receive financing of up to US$ 500 million (50 percent of its quota).
An RFI comes with no ex-post conditionality.
Countries would receive the full amount for which they are eligible under the RFI at the time of Board approval, provided they meet all other applicable IMF policies.

After a country requests support:
- IMF staff will assess qualification requirements.
- Staff will work with the authorities to prepare a letter of intent.
- Staff will prepare a staff report for the IMF Executive Board.
Typical time between a request for an RFI and disbursement of financing: around 4-8 weeks.

Financial assistance under the RFI is subject to similar interest terms as the Extended Fund Facility Arrangement.
The cost of Fund credit is about 1.5 percent.
Repayment horizon: should be repaid within 3¼ to 5 years.