Bond Market News

Ecuador is all set to receive $1.5bn this year in new disbursements from the IMF following a new staff level agreement with the fund. The agreement comes as the Ecuador government has agreed to put in place fiscal reforms and spending cuts as it seeks to achieve an economic recovery. The Latin American nation was hit hard by last year’s drop in oil prices and measures undertaken to curtail the coronavirus which resulted in its GDP shrinking 7.5%. Simon Cueva, the South American nation’s finance minister said, “We’ve been in talks with the (International) Monetary Fund about how to reorient the program that was in place with the IMF to align it with the objectives and priorities of the current government,” while adding, “The current government seeks economic recovery and sustained growth, and to ensure fiscal equilibrium in the medium term”. He also emphasizes that the country’s poor would not be affected by the reforms as the government will not include the value-added tax, a tax that tends to have a greater impact on lower-income people, in the reforms.  This year the Andean nation also aims to double its oil production and take advantage of the higher oil prices.