Ecuador declares moratorium on foreign debt payment

December 14th, 2008 - 7:26 pm ICT by IANS  

Guayaquil (Ecuador), Dec 14 (Prensa Latina) Ecuador has declared a moratorium on payment of part of its $10 billion foreign debt citing contract irregularities. President Rafael Correa said the government would not pay the $30 million as interest on 2012 global bonds, the payment deadline of which expires Monday.

“I gave the order to suspend payment of interests (on 2012 global bonds). So the country is in default of its external debt,” Correa told reporters in the southwestern city.

The president said the government had been in consultation with legal and financial experts to revoke what he called “an illegal and illegitimate debt”.

“We are also ready to present a restructuring plan to creditors, as most of the debt is illegal,” Correa said.

Ecuador’s external debt equals to about 20 percent of its gross domestic product (GDP), and international bonds make up $3.86 billion of the foreign debt.

Part of the global bonds came in the wake of the Ecuador’s great economic crisis in 1999-2000 when the national banks collapsed and the country defaulted on foreign debt.

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