Reuters

This selection appeared at Forbes.com
on March 13, 2003.

QUITO, Ecuador, March 13 (Reuters) - Ecuador is negotiating with the International Monetary Fund for it to expand an anticipated $200 million loan so that the country can pay debts to the Paris Club creditor nations, the Central Bank's president said on Thursday.

The IMF board is due to meet next Wednesday in Washington to approve the loan, which is key for Ecuador to keep up to date with payments on its $14 billion public debt.

There is a possibility this loan could be increased in order to allow Ecuador to pay of part of its debt to the Paris Club, Central Bank head Mauricio Yepes said.

The country has used $56 million of its treasury funds to pay off much of $80 million in overdue payments due to the club. The remaining back payments could either come from the IMF, or directly from state coffers, according to Yepes.

"The good news is that the Fund itself could provide us with the resources to make that payment," he said, in reference to debts with the Paris Club, which is an association of government creditors.

"But we are negotiating," he said, without providing more details.

The Paris Club is also due to discuss reprogramming of debt payments during the 13 months of the IMF accord.

"We have an agreement with the Paris Club to restructure all the maturities in 2003," Yepes said, explaining that Ecuador could ask for about $100 million in maturities to be reprogrammed.

Ecuador's debt with the Paris Club totals $1.3 billion.

Ecuador, which defaulted on some foreign debt in 1999, has restructured debt with the Paris Club seven times, and has failed to meet the terms of six of these agreements.

The 13-month IMF program would also grant Ecuador access to $300 million in loans from other multilateral agencies.

The poverty-stricken nation must make $2.24 billion in debt payments this year.