WASHINGTON (Reuters) – The International Monetary Fund said on Thursday its board approved a review of Ecuador’s compliance with its IMF financing program, allowing Quito to draw $498.4 million in new funds as the oil-producing country works to stabilize its finances.
“The Ecuadorian authorities have continued to make progress in strengthening the country’s fiscal and external positions and have appropriately recalibrated their economic program to include a more moderate fiscal consolidation,” the IMF board said in a statement.
Ecuadorean President Lenin Moreno in October withdrew an IMF-backed fuel subsidy cut that had sparked days of violent protests led by indigenous people. The fund had said it would work with the government to find other ways to raise revenues.
The IMF had said passage of recently proposed tax reforms in Ecuador was important to completing of the latest review of a $4.2 billion IMF loan and made Ecuador’s tax system “more growth friendly, simple and equitable.”
“The Ecuadorian authorities have demonstrated commitment to fiscal prudence, which remains key to fiscal sustainability, the IMF said. “Protecting the poor and increasing the social safety net are central priorities in the government’s program.”
The fund also called for continued reforms to public financial management to secure fiscal sustainability.
(Reporting by David Lawder; Editing by Richard Chang)