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IMF board approves deal with Ecuador releasing $800 mn in aid

·1-min read
Ecuadorian Minister of Economy Simon Cueva (right) reached a deal with the IMF earlier this month that unlocked $800 million for the crisis-hit country (AFP/RODRIGO BUENDIA)

The IMF board announced on Wednesday the release of $800 million in aid for crisis-hit Ecuador after approving a deal reached earlier this month on the government's economic policies.

The aid is latest tranche under Ecuador's existing 27-month, $6.5 billion loan program with the Washington-based crisis lender approved in September 2020, and brings the total disbursed to $4.8 billion.

IMF Deputy Managing Director Antoinette Sayeh noted the country has struggled due to the Covid-19 pandemic and associated oil price shocks last year, which have driven over 400,000 families to seek government support.

"The recovery has been slow but the accelerated pace of vaccinations, the improving global economy and funding from the IMF and other (institutions) are supporting Ecuador's recovery," Sayeh said in a statement.

Continued support of the nation's social safety nets will be "crucial to mitigate the impact of the pandemic on the most vulnerable," she said.

The IMF approved the Extended Fund Facility last year with the government of former president Lenin Moreno, but the latest deal was reached with the administration of right-wing President Guillermo Lasso who took office in May.

Ecuador's economy contracted by 7.8 percent in 2020 and the IMF projects it will expand by 2.75 percent in 2021 and 3.5 percent in 2022.

hs/cs

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