Ecuador Pledges to Repay Its Debts Despite Liquidity Crunch

Change to central bank repayment plan won’t tap reserves
Ecuador wants to be able to return to foreign debt markets

Juan Carlos Vega, Ecuador’s finance minister, speaks during a press conference at the Finance Ministry headquarters in Quito, Ecuador, on Monday, Dec. 18, 2023. Vega said that Ecuador’s new government is committed to repaying the country’s foreign and domestic debt.Photographer: Andres Yepez/Bloomberg

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By Stephan Kueffner

December 18, 2023 at 6:42 PM UTC

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Ecuador’s new government is committed to repaying its domestic and foreign debts despite a desperate year-end payments crunch, Finance Minister Juan Carlos Vega said Monday, seeking to use one of his first public appearances to reassure anxious investors about the country’s finances.

Cash in Ecuador’s Treasury dwindled to just $95 million in the first week of December, forcing the ministry to use all available methods to meet salary and other payment requirements this month. Ecuador’s deficit, meanwhile, has ballooned to $6 billion amid lower-than-expected oil and tax revenues, high global interest rates and the previous government’s failure to sell off state assets.