LatinNews Daily - 09 February 2021

In brief: Central bank reform tabled in Ecuador

* Ecuador’s President Lenín Moreno has submitted to the national assembly (AN) a bill seeking to reform the country’s central bank (BCE), most notably prohibiting it from lending money from Ecuador’s international reserves to finance public spending. The economy ministry has said that the reform – a condition of the US$6.5bn credit agreement signed with the International Monetary Fund (IMF) in 2020 – will give the BCE “technical autonomy to avoid political and irresponsible use [of international reserves]”. However, the bill has faced criticism from opponents (most notably presidential candidate Andrés Arauz, who placed first in Ecuador’s 7 February general election, but will face a second-round run-off vote in April) who claim that it is in violation of the constitution, and will make the country reliant on foreign creditors, as well as allowing private sector interests to influence monetary policy. The timing of this bill has also drawn scrutiny – with Moreno due to leave office in just a few months, critics have questioned his authority to appoint the board of directors which will govern the BCE if the bill is passed. However, the government does not control a majority in the AN, and may struggle to approve the bill before Moreno’s term expires.

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