Via IMF (Den Internationale Valutafond)

IMF Executive Board Concludes Second and Third Reviews of the Extended Arrangement Under the Extended Fund Facility for Ecuador, Approves US$498.4 Million Disbursement

December 19, 2019

The Executive Board of the International Monetary Fund (IMF) today
completed the combined second and third reviews of Ecuador’s performance
under its economic program supported by the Extended Arrangement under the
Extended Fund Facility (EFF). The completion of both reviews allows the
authorities to draw the equivalent of SDR 361.3 million (about US$498.4
million). The 36-month Extended Arrangement with a total access of SDR
3.035 billion (about US$4.2 billion), the equivalent of 435 percent of
Ecuador’s quota in the IMF, was approved by the IMF’s Executive Board on
March 11, 2019 (see

Press Release 19/72


Following the Executive Board discussion, Mr. Mitsuhiro Furusawa, Deputy
Managing Director and Acting Chair, summarized the Board’s findings:

“The Ecuadorian authorities have continued to make progress in
strengthening the country’s fiscal and external positions and have
appropriately recalibrated their economic program to include a more
moderate fiscal consolidation and international reserves’ paths in response
to recent developments and to protect pro-poor growth and social spending.

“The Ecuadorian authorities have demonstrated commitment to fiscal
prudence, which remains key to fiscal sustainability. In this context, the
recently approved tax reform will raise revenues and make the tax system
more growth-friendly, simple, and equitable.

“Protecting the poor and increasing the social safety net are central
priorities in the government’s program. The authorities have introduced new
measures to improve the adequacy and coverage of the social safety net.
Continued work is needed to upgrade the social registry, which will allow
for a better targeting of social assistance spending. To support the
authorities’ efforts, the program’s floor on social assistance will be

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“Public financial management reforms are paramount to secure fiscal
sustainability in the longer term. The revised reform of the Organic Budget
Code will be key to fortifying expenditure controls, limiting budget
discretion, introducing mechanisms to address arrears, and improving the
framework for fiscal rules. Continued work will be needed in the area of
debt management to reduce borrowing costs and ensure a more efficient
allocation of resources.

“The reform of the central bank aimed at strengthening central bank
autonomy, accountability, and governance will be instrumental in supporting
the dollarization regime, boosting reserves, and ensuring their prudent

“The financial system continues to be stable, and sustained reforms will
help solidify the system. In this context, strengthening credit risk
regulation and closing other regulatory gaps are priorities. Upgrading
banking and cooperatives’ supervision, building the macroprudential
framework, and simplifying liquidity requirements will help reinforce the
financial system in the longer term.

“Efforts to raise competitiveness should continue to focus on improving
transparency, strengthening governance, increasing efficiency of the public
sector, and creating conditions in the labor market to facilitate hiring
and female participation.”

IMF Communications Department

PRESS OFFICER: Maria Candia Romano

Phone: +1 202 623-7100Email: