Ecuador requests $1 billion credit line as natural disasters compound insecurity
Ecuador is reportedly asking the IMF for a credit line as a string of natural disasters further undermines the Andean country’s economy. Destruction from a large earthquake, flooding and landslides is contributing to investor skittishness, Bloomberg reports.
Finance Minister Pablo Arosemena attempted to reassure money managers on the sidelines of the IMF spring meetings this week that the country is solvent after pro-business President Guillermo Lasso’s crushing referendum defeat in February and a second impeachment attempt sent the country’s bonds below 30 cents on the dollar, according to data compiled by Bloomberg.
Ecuador’s challenges run deeper than the recent natural disasters, with oil production being repeatedly halted by frequent political protests. Also, the commercial capital of Guayaquil has been rocked by fighting between rival gangs vying for control of lucrative drug trafficking routes, pushing the country’s homicide rate past those of Brazil and Mexico, long ranked among Latin America’s most violent countries. Investors are concerned such factors will lead to a political revival of the hard-left faction of former president Raphael Correa.