*The executive board of the International Monetary Fund (IMF) has approved a new 48-month, US$4bn arrangement with Ecuador under the Extended Fund Facility (EFF), which was agreed at staff level in late April. The green light from the executive board enabled the immediate disbursement of US$1bn to Ecuador. According to an IMF statement, the new arrangement “aims to support Ecuador’s policies to stabilise the economy, safeguard dollarisation, and lay the foundations for sustainable and inclusive growth”. The IMF said that President Daniel Noboa’s government will reform the tax regime to improve the fiscal balance and reduce spending via “efficiency gains” in state companies. The IMF also said that the government will “improve the targeting of fuel subsidies”, suggesting that these will be cut. A previous attempt to slash fuel subsidies in line with IMF demands triggered major protests against former president Lenín Moreno (2017-2021) in October 2019. The IMF’s managing director, Kristalina Georgieva, said that the Noboa administration will need to “rebuild liquidity buffers” and “advance the structural reform agenda”, adding that “strong commitment to the programme and steadfast reform implementation will be critical for success”.
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