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Ecuador vows to pay debt for first time ever

imageQUITO: Ecuador will pay $650 million in bonds due on December 15, President Rafael Correa vowed Friday, seeking to boost the habitual defaulter's credit-worthiness after 180 years of missed payments.

Since it gained independence in 1830, Ecuador has never paid its sovereign debt on time and in full, something Correa promised to change as he seeks better borrowing terms amid a collapse in the price of oil, the OPEC member's key export.

"For the first time in history, Ecuador is going to pay its sovereign bonds," Correa told journalists.

"We will pay the $650 million due on December 15" for the South American country's 2015 bonds, he said.

That is unprecedented in the past 180 years, said economic analyst Alberto Acosta Burneo of consultancy Spurrier.

"Ecuador has never complied with an on-time payment of its debt obligations," he told AFP.

Correa himself declared a large chunk of the country's debt "illegitimate" in 2008 and only paid it off at discounts of between 65 and 70 percent, for a total of around $900 million.

But with the economy mired in hard times, he is keen to improve relations with international creditors.

"We're facing the perfect storm," he said Friday, referring to the slide in oil prices and the economic slowdowns in Russia, one of Ecuador's top markets for non-oil exports, and China, the country's largest creditor.

"This will give a signal that Ecuador wants to honor its debts," said Acosta Burneo.

Ecuador had $20.3 billion in foreign debt in October, according to the central bank. It issued $1.5 billion in 2020 bonds between March and May.

Copyright AFP (Agence France-Presse), 2015