Ecuador’s President Urges Calm
President Jamil Mahuad urged his countrymen to remain calm in the face of demands by foreign creditors for immediate repayment of $1.4 billion of debt.
On Friday creditors rejected Ecuador’s pleas for more time to renegotiate $6 billion in U.S.-guaranteed Brady bonds and demanded immediate repayment of $1.4 billion.
Ecuador, mired in its worst economic crisis in 70 years, defaulted on the bonds Thursday, missing a $44.5-million interest payment.
“We must remain calm, tranquil and firm,” Mahuad said Saturday in his weekly radio message to the nation.
He said it was possible to keep negotiating with Ecuador’s creditors even if they initiated civil suits in the United States to obtain repayment.
Brady bonds, named after former U.S. Treasury Secretary Nicholas Brady, were issued in 1994 to restructure bad loans resulting from the Latin American debt crisis of the 1980s. They are partly backed by U.S. Treasury securities.
Ecuador became the first beneficiary of the bonds to default.
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