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  • Shielding Dollarization - WA#04
    Shielding Dollarization - WA#04

    Bank financial statements to December 31

  • At the end of the year there tends to be a money supply spike, inter alia, due to greater public obligations featuring end-year bonuses. This year the IMF disbursement also boosted liquidity. As of December 2020, deposits reached 37.6% of GDP, a y-o-y increase of 7.7 percentage points. (WA#04)

  • The price of Ecuadoran crude rose $1/b in November at $36.9/b. The markdown from WTI rose to $4.0/b. Based on the assumed prices for PetroEcuador and the price differential it is to expect that Ecuadoran crudes rose to about $43/b in December. On January 5, Saudi Arabia announced it was cutting its output 1M bpd in addition to its quota. There was a jolt to prices. Ecuadoran crude is now expected to rise to about $47.5/b in January. (WA#03)

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Grupo Spurrier is the leading company in the development of key solutions and services for business success; it specializes in monitoring the economy and politics of Ecuador, as well as on economic research, market research, consulting and corporate training, models and business plans development, investment plans, and market power law consulting.

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Weekly Analysis Briefs

  • 04.- SHIELDING DOLLARIZATION

    As presidential elections near, banks are again blamed for the hardship. Unlike what stump speeches proclaim, 2020 was evidently a complicated year for banks. Risks have not gone away. The lock downs deteriorated portfolio quality. The banking system reacted by creating a first barrier of protection through a massive provision increase. The cost...

  • 03.- OIL UP, DOLLAR DOWN

    The year starts with good news: The IMF funds arrived and arrears were reduced. The price of oil recovered. The dollar has been depreciated. And a U.S. agency will extend a $3.5B loan to wean Ecuador from China. Still, markets are restless, and country risk is climbing. The feeling is that Ecuador must do more this year to straighten its finance...

  • 02.- IS A SHORT CIRCUIT AHEAD?

    In May the initial program with the IMF was replaced by an extended facility that includes $6.5B in financing. The objectives of the new program are narrower and focus on achieving fiscal sustainability, coverage of vulnerable groups and the fight against corruption. Politically more complicated goals were withdrawn from the agreement. The path ...