Disbursement of IMF money will begin immediately, Moreno says, following $6.5 billion loan approval

Oct 1, 2020 | 5 comments

President Lenín Moreno said Wednesday he would meet with cabinet ministers to determine how to disburse a $2 billion payment from the International Monetary Fund (IMF) that is expected on Friday. “We have many critical needs and will prioritize these in our meetings,” he said.

IMF director Kristalina Georgieva

The president’s announcement followed approval by the IMF board of directors of a $6.5 billion loan package to Ecuador to be distributed over 18 months. The approval opens the door for an additional $3 billion in loans from regional development and private banks.

“Many of our citizens and institutions have suffered from the effects of the coronavirus pandemic and we will distribute funds as quickly and efficiently as possible,” Moreno said. “The priority will be to first help our poorest and most vulnerable citizens but we must also meet our obligations to local governments, employees, retirees and contractors.” In recent weeks, there have been dozens of protests in major cities by unpaid government employees and contractors.

In announcing approval of the loan, IMF director Kristalina Georgieva said Ecuador had agreed to a broad range economic and social changes to stabilize its fiscal affairs. “The government has presented a bold, forward-looking plan that involves tax reform, trade policy changes and debt management procedures that will put the country on firm economic footing,” she said.

Just as important, Georgieva said, were a commitment to social and political change to improve transparency of public spending and reduce corruption. “There are immediate needs to deal with the impact of the pandemic on the citizens but, beyond this, the country must establish better controls over public funds.”