Government has a week to close agreement with IMF or debt renegotiation will not take place

The country has not concluded any agreement with the multilateral and restructuring could be at risk.

The closing of the renegotiation of the Ecuadorian public debt with the bondholders is subject to the Government reaching an economic agreement at a technical level with the International Monetary Fund (IMF). The country had until August 20 to close this deal, but requested an extension from the bondholders until September 1.

One of the conditions for the restructuring of the country’s public debt is that the government reaches a new agreement with the IMF, but so far no deal has been finalized and the negotiation could be in jeopardy.

According to Augusto de la Torre, advisor to the Government’s Economic Council, this agreement has not yet been closed because at the moment Ecuador is in a “bargaining moment” with the IMF. In addition, the decision of the Constitutional Court to eliminate the advance of the income tax that the Government decreed for companies that have had profits greater than USD 5 million, in the first half of 2020, would have been another of the reasons for not closing this negotiation.

Due to this, the Government would have had an impasse (lack of agreement) with the IMF’s technical mission, headed by Ceyda Oner, for which the decision of a new loan for the country was elevated to the director of the Western Hemisphere or even to the own Managing Director of the IMF.

Despite this, the Ministry of Economy and Finance announced that the country has received USD 2 billion in credits from multilateral organizations in recent months.