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Ecuador is the Latest Developing Country to Restructure Chinese Debt

Ecuadoran President Guillermo Lasso speaking at an event at the Central Park Zoo in New York City on September 20, 2022. Bryan R. Smith / AFP

The Ecuadorian government announced a major debt restructuring deal with China’s two largest policy banks that will provide $1.4 billion of debt service relief over the next three years.

President Guillermo Lasso said his administration reached an agreement this week with the China Exim Bank and the China Development Bank that will ease the repayment terms for $4.4 billion of loans. In typical Chinese fashion, none of the outstanding debt will be canceled. Instead, the banks agreed to extend the term of the loans and reduce both the interest rates and amortization.

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