Ecuador shuns the IMF, borrows from China

14 September 2011

Ecuador is shunning IMF credit facilities in favour of a long-term loan arrangement with China in exchange for oil. This arrangement, in which China will buy 52 per cent of Ecuadorean oil, is preferable to “the horrendous adjustments imposed by the IMF”, according to Ecuador’s President Rafael Correa – who is adamant that the country will not approach the IMF for credit. Total loans from China to Ecuador are estimated by Maria de la Paz Vela, economic analyst at Multiplica Consultancy, to amount to $7.2 billion (11.7 per cent of GDP), with the latest loan of $2 billion to be repaid over eight years at 6.7 per cent weighted interest.