WASHINGTON (Reuters) -The International Monetary Fund said on Thursday that Ecuador is performing well in meeting the targets of its expanded $5 billion IMF loan program, but still needs to overcome challenges from oil price volatility to domestic security that are making capital markets access difficult for the South American country.
IMF spokesperson Julie Kozack told a regular press briefing that the Fund was working with Ecuadorean authorities to determine the timeline for the next review of the program to unlock additional loan funds. The program was expanded by $1 billion in July with an immediate $600 million disbursement.
“Even though investors have recently started seeing Ecuador as a bit less risky, it is still a challenge for the country to access international capital markets in the very near term,” Kozack said. “The increasing frequency of natural disasters as well as an unsettled security situation pose additional challenges for Ecuador.”
She said it was important for Ecuador to reform its fuel subsidies to make them more targeted toward the country’s most vulnerable citizens.
Fuel subsidies generally benefit higher-income groups and can lead to corruption and fuel smuggling, so narrowing their scope will help free up resources for critical spending needs including more effective social safety nets, Kozack said.
(Reporting by David LawderEditing by Bill Berkrot)
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