IMF and Ecuador reach agreement on $4.2 billion fund

The International Monetary Fund's staff is agreeing to support Ecuador with $4.2 billion over the next three years

WASHINGTON -- The International Monetary Fund's staff has agreed to support the economic policies of the Ecuadorean government with $4.2 billion over the next three years.

The arrangement is expected to be brought to the IMF Executive Board for its final approval in the coming weeks.

The IMF said the agreement is part of a broader effort by the international community that totals $10 billion and includes financial support of almost $6 billion over the next three years from the Development Bank of Latin America, the Inter-American Development Bank, the Latin American Reserve Fund and the World Bank.

"The government's plan is aimed at creating a more dynamic, sustainable, and inclusive economy," said Anna Ivanova, the IMF's mission chief for Ecuador.

Ecuador faces a fiscal deficit of $10 billion, which has caused delays in paying salaries to government employees and suppliers.

The agreement marks the end of at least a decade-long estrangement of the South American nation with the IMF since then-President Rafael Correa kicked out the IMF mission short after taking office in 2007.

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Luis Alonso Lugo on Twitter: http://www.twitter.com/luisalonsolugo