Ecuador's Economy Minister Richard Martinez (C) offers a press conference, along with other government representatives.
WASHINGTON - The International Monetary Fund on Monday approved a $4.2-billion, three-year loan for Ecuador, part of a broader aid package to help support the government's economic reform program.
The Washington-based lender agreed to the terms of the financing late last month, and the final approval of the IMF board on Monday releases the first installment of $652-million.
IMF Managing Director Christine Lagarde said the aid will support the government's efforts to shore up its finances, including a wage "realignment," gradual lowering of fuel subsidies, and reduction of public debt.
"The savings generated by these measures will allow for an increase in social assistance spending over the course of the program," Lagarde said in a statement, stressing that "Protecting the poor and most vulnerable segments in society is a key objective" of the program.
Quito is expected to receive another $6-billion from the Development Bank of Latin America, the Inter-American Development Bank, the World Bank and the Latin American Reserve Fund.
"The Ecuadoran authorities are implementing a comprehensive reform program aimed at modernizing the economy and paving the way for strong, sustained, and equitable growth," Lagarde said.
IMF performs periodic reviews of its loans to ensure governments are following through on its policy pledge and then releases funds in installments.