News Brief No. 99/61

News Brief: IMF Urges Collaboration Between Ecuador and Its Creditors

September 27, 1999

The Managing Director of the International Monetary Fund (IMF) has taken note of the announcement by President Mahuad outlining the proposed strategy to address Ecuador's debt difficulties. He regrets that to date Ecuador appears not to have found it possible to enter into negotiations with its creditors, with a view to reaching a comprehensive resolution of these difficulties in a collaborative manner.

The Managing Director continues to urge the authorities to establish a collaborative framework for negotiations with its creditors with the objective of reaching agreement on a comprehensive financing package that would provide adequate cash flow support during the period of the proposed economic program, on terms consistent with Ecuador's return to medium-term debt sustainability. The Managing Director also urges the authorities to adopt and implement the stabilization and structural reform policies, particularly in the fiscal and financial sectors, that have been agreed with IMF staff.

The Managing Director would be willing to recommend to the Executive Board the approval of Ecuador's request for financial assistance under a stand-by arrangement once agreed policy measures have been implemented and provided Ecuador is judged to be making good faith efforts to reach a collaborative agreement with its creditors.