IMF Approves $4.2B Fund for Ecuador

The Executive Board of the International Monetary Fund (IMF) today approved a US$ 4.2 billion arrangement under the IMF’s Extended Fund Facility (EFF) for Ecuador which allows the immediate disbursement of 652 million dollars.

The decision was announced by the agency in a statement released in Washington after the agreement signed on February 21 between the IMF and the Ecuadorian authorities.

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The agreement, part of the IMF’s Extended Fund Facility (EFF), provides support to the economic policies of the Ecuadorian Government for the next three years.

“The Ecuadorian authorities are implementing a comprehensive reform program aimed at modernizing the economy and paving the way for strong, sustained, and equitable growth. The authorities’ measures are geared towards strengthening the fiscal position and improving competitiveness and by so doing help lessen vulnerabilities, put dollarization on a stronger footing, and, over time, encourage growth and job creation," said IMF Director Christine Lagarde, at the end of the Executive Board meeting. according to the note.

After knowing of the pact with the IMF, the former Ecuadorian president Rafael Correa, who during his term (2007-2017) broke ties with that agency when considering that its credit conditions went against sovereignty, called it "unnecessary".

"It is highly costly at the social level and will be costly at the political level, even at an economic level," Correa told Efe in Brussels on February 27.

For the leader, "an agreement with the fund is not an achievement, it's just submission" and criticized that the government of Lenin Moreno prefers "to resort to the fund saying that everything is wrong, that everything is in crisis, to protect their interests and hit the Ecuadorean people with a club ".

Skepticism against the IMF is strong in Ecuador, as well as in several Latin American countries, due to the effects of its policies on local economies. Workers Unions have threatened protests against the agreement.