Bondholders will find out on April 20 how the Ecuadorean
government plans to deal with the default on its 2012 and 2030
President Rafael Correa announced yesterday that the government
would present bondholders with a comprehensive plan for a
buyback of the debt.
The presidents remarks, during his weekly radio
programme, contradicted comments by finance minister Maria
Viteri, who said at the IDB meeting in Medellin that a plan
would be announced in April, but that no specific date had been
Viteri said the government had warned her not to release any
information, including the date, until bondholders were
provided with information on the deal. She said only that
Ecuador would present a viable and serious proposal to
There are many questions about the governments ability to
cut a deal acceptable to bondholders. One problem is its cash
flow: international reserves have fallen to $3.4 billion from
$6.5 billion, according to the most recent analysis from
Both Correa and Viteria were more forthcoming about other
issues, and especially on claims that the government wants to
ditch the US dollar, adopted in 2000 as the Ecuadorean
Correa said lawmakers should consider jail time for people who
spread malicious rumours aimed at destabilizing the economy
such as the possibility of dedollarization
because this was akin to treason.
Viteri scoffed at rumours that the government not only had
decided on a new currency, but also had a name for it, condor.
There are no condors, just those in the sky, she
Pedro Delgado, a central bank official, said there is plenty of
evidence of Ecuadors commitment to dollarization, even
though it has been painful as a result of the economic
The administration early this year announced new import tariffs
on nearly 700 products. The decision, which has been attacked
by neighbouring trade partners Colombia and Peru, was upheld on
27 March by the Andean Community, the 40-year old regional bloc
that also includes Bolivia.
Viteri said the criticisms are unfair. She said that no one was
asking about the negative impact that devaluation of the
Colombian currency has had on the Ecuadorian economy.