Ecuador's Moreno says IMF board approves $6.5 billion loan

Ecuadorean President Lenin Moreno said on Wednesday the International Monetary Fund's executive board approved a $6.5 billion loan for Ecuador that would provide financial support for sectors affected by the coronavirus pandemic. Ecuador reached a technical agreement in August with the IMF to access the loan within the framework of the Expanded Service program as the oil-exporting nation is hit by low crude prices and the effects of the pandemic.

Ecuadorean President Lenin Moreno said on Wednesday the International Monetary Fund's executive board approved a $6.5 billion loan for Ecuador that would provide financial support for sectors affected by the coronavirus pandemic.

Ecuador reached a technical agreement in August with the IMF to access the loan within the framework of the Expanded Service program as the oil-exporting nation is hit by low crude prices and the effects of the pandemic. The Andean country's economy contracted by some 12.4% in the second quarter of 2020 compared to the same period last year, the largest decline in 20 years, the central bank said on Wednesday.

"The loan from the International Monetary Fund today has been unanimously approved," Moreno told reporters. "We will have a meeting with the ministers ... to be able to make the respective allocation of these resources." The funds will begin to arrive on Friday, Moreno said, without providing details.

The IMF declined to comment. In the technical agreement, Ecuador pledged to reduce crisis-related spending in 2021, implement a fiscal reform package to improve public finances, and protect the purchasing power of Ecuadorean families.

That agreement helped the Andean country successfully renegotiate its sovereign bonds last month. Ecuador reached an IMF agreement for about $4.2 billion in February 2019, but the arrangement was canceled in May because of the impact of the pandemic and the fall in oil prices.

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