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  • President Lenin Moreno, Quito, Ecuador, August 3, 2020.

    President Lenin Moreno, Quito, Ecuador, August 3, 2020. | Photo: Twitter/ @TPU19J

Published 3 August 2020
Opinion

However, the Moreno administration extended the deadline for its creditors to join the deal.

Ecuador’s President Lenín Moreno Monday assured that most foreign debt bondholders agreed to renegotiate his country's sovereign bonds.

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"We reached the majority necessary to renegotiate our foreign debt bonds," Moreno tweeted.

On August 3, the date for the renegotiation of the Ecuadorian external debt, which began about six months ago, expired. The Economy Ministry announced that the necessary votes were reached on time.

The Ecuadorian authorities said that they seek a reduction of US$1.54 billion in the country's debt. If this happens, the next government, the next government may defer payment of about US $ 10 billion.

The Ecuadorian government proposes to its creditors that the average interest rate drops from 9.2 to 5.3 percent. It also asks that the term for the debt payment be increased from 6.1 to 12.7 years. Payment of principal would occur even after a 5-year grace period.

According to the Finance Ministry, 75 percent of the 2024 bondholders would have accepted these conditions. This optimistic evaluation, however, contradicts another official announcement: the government extended the deadline to join "the swap" for one more week.

Even with this supposed policy achievement, President Moreno's credibility fell to 8 percent at the end of July, according to a survey released by Cedatos/Gallup on Monday.

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