QUITO, Ecuador - Ecuador has withdrawn from talks with the International Monetary Fund ( news - web sites) over a US$240 million standby agreement, Finance Minister Francisco Arosemana said.
Arosemana told reporters Thursday that the government decided to leave the financing negotiations for Ecuador's next administration, which will take office in January.
Officials had been resisting IMF demands to help cover spending by raising prices of public services and slashing wages. The negotiations over a letter of intent to unlock the US$240 million credit began early this year.
Arosemana said Ecuador would continue cooperating with the world lending body. The decision to end the loan talks would "contribute to the new president-elect having a favorable environment in the transition," he said.
Ecuadoreans vote for president on Oct. 20. If none of the 11 candidates wins an outright majority, the top two finishers will compete in a Nov. 24 runoff.
The IMF forecasts that Ecuador's economy will grow 3.5 percent this year, one of the highest rates in Latin America.
But economists warn that the government will face a financing squeeze next year as large foreign debt payments come due.
The IMF's stamp of approval is necessary for Ecuador to tap credits from other multilateral lenders, such as the World Bank ( news - web sites) and Inter-American Development Bank.
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