ECUADOR SUSPENDS PAYMENTS TO PRIVATE BANKS
Ecuadorean President Leon Febres Cordero
said his country was unilaterally suspending payments to
private foreign banks due to last week's earthquake which
caused up to one billion dollars in damage.
    Febres Cordero, quoted in an Information Ministry
communique, said: "We have to ratify this suspension ... on debt
service to the private international banks.
    "I am not ashamed to say it, there definitely isn't a way to
pay," he said.
    Ecuador had already suspended payments to private foreign
banks, holding two-thirds of Ecuador's 8.16 billion dollar
foreign debt, from last January due to a cash-flow squeeze
stemming from a slide in world oil prices last year.
    But finance officials had earlier said the length of the
suspension would depend on negotiations with private foreign
banks.
    The information ministry communique said febres cordero
made these statments to reporters at lago agrio, at the heart
of ecuador's region of jungle oilfields, before returning to
quito.
    Febres cordero said up to a total of 1,000 people died or
were missing in avalanches and mudslides during the march 5
earthquake.
    The tremor damaged an oil pipeline, thus barring all crude
exports for a projected five months. Oil accounts for up to
two-thrids of ecuador's total exoprts and for as much as 60 per
cent of the government's revenues.
    He did not specify for how long the suspension of payments
would last.
    Ecuador owes private foreign banks 450 to 500 mln dlrs in
interest payments for the rest of the year and 66 mln dlrs
in principal payments maturing in 1987, finance officials said.
    Finance minister domingo cordovez said two days ago the
government seeks to postpone all the payments due to private
foreign banks in 1987 until next year through negotiations with
these creditors.
 Reuter
