President Moreno seeks IMF’s Financing Instrument to cushion COVID-19 effects

Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF) , in this statement made available to OpenLife, explains the rationale behind  President Lenin Moreno’s quest to access the Fund’s Rapid Financing Instrument (RFI) to protect the economy of Ecuador

“Like many other countries, Ecuador’s economic challenges have been compounded by the devastating effects of the COVID-19 outbreak and the sharp fall in world oil prices. President Lenin Moreno and his government have responded quickly and decisively to help protect Ecuadorians from the impact of these rapidly evolving global developments, by putting in place a series of measures to stabilize the economy and prevent the further spread of the virus. In the context of adverse global developments, Ecuador is facing severe financing constraints and will require the support of all its stakeholders.

“In light of urgent need to quickly step up action to protect people and the economy, the Government of Ecuador expressed its intention to seek our financial support through the Fund’s Rapid Financing Instrument (RFI). This emergency financial tool will allow the government to address urgent balance of payments needs and will support policies that would make it possible to direct funds swiftly to Ecuador’s most affected sectors, including the healthcare system and social protection, to bolster its response to COVID-19. Our team is working expeditiously to respond to this request so that a proposal can be considered by the IMF’s Executive Board.  

“In parallel, my staff is immediately engaging with the authorities on a successor Fund-supported arrangement that builds on the current Extended Fund Facility (EFF), to bolster Ecuador’s economic performance, strengthen the foundations of dollarization, and deliver broad based benefits for all Ecuadorians, especially the most vulnerable part of the population.

“Our objective is to provide immediate support to help Ecuador address the effects of a mounting global health crisis, while continuing to support the authorities’ unwavering commitment to implement much-needed economic and structural reforms aimed at fostering strong, sustainable and inclusive growth.”