International Reserves (IR) experienced an accumulation process throughout 2024, reaching USD 6.9 billion by December 31, 2024. This level of reserves represents an annual increase of USD 2.445 billion, which allowed for the coverage of 100% of the liabilities of the first and second balance systems of the Central Bank of Ecuador (BCE). Therefore, the BCE’s responsible management of the IR enabled the full coverage of deposits held by BanEcuador, private financial institutions, and those of the popular and solidarity economy, as well as deposits from other financial institutions such as the National Financial Corporation (CFN) and Bank of the Ecuadorian Social Security Institute (Biess).

The increase in IR from USD 4.454 billion in December 2023 to USD 6.9 billion in December 2024 is mainly due to positive flows from the private sector and the operations of the BCE.

Source: Central Bank of Ecuador

Notes: (1) Includes mainly BanEcuador’s cash deposits and withdrawals from BCE vaults and movements abroad of the Deposit Insurance Trusts (COSEDE); (2) Includes mainly movements abroad of the Liquidity Fund Trusts (COSEDE); (3) Valuation and sale of monetary gold, cash outflows and inflows and valuation of T-Bill and Fixbis.

Net international transactions made by the private sector (households and companies) in 2024 were historically the highest values since statistical records of this indicator began, amounting to USD 1.954 billion. This result was in line with the performance of the non-oil trade balance, which recorded a surplus of USD 2.691 billion from January to October 2024, as well as the favorable trend in remittances received, which up to the third quarter of 2024 amounted to a cumulative income of USD 4.753 billion, representing an increase of USD 802 million compared to the same period in 2023. Additionally, it is important to highlight the confidence of institutional depositors, particularly entities within the Ecuadorian financial system, in maintaining liquid resources at the Central Bank of Ecuador (BCE).

In 2024, the difference between deposits and cash withdrawals from the vaults of the Central Bank of Ecuador (BCE) by entities of the national financial system had a positive flow of USD 29 million. Historically, this behavior reflects a lower demand for cash since 2014, which is consistent with the increased use of digital payments by the public.

The net value of remittances from the public sector includes the net values between disbursements and payments for external debt, import and export of hydrocarbons, and other public sector payments with the exterior. Public sector movements resulted in a reduction of international reserves (IR) by USD 401 million. This decrease is mainly explained by the negative net values of public remittances with the exterior and public external debt, partially offset by the higher flow of hydrocarbons. However, it is important to highlight that this item improved by USD 2.053 billion compared to 2023.

Regarding the flows from public external debt, due to the beginning of a new Extended Fund Facility with the International Monetary Fund, the Ecuadorian State received significantly higher disbursements than in the past three years. In this way, the National Government received USD 5.342 billion from multilateral organizations in 2024, recording a 133% increase compared to 2023.

On the other hand, the external debt service incurred in previous periods, which includes principal repayment, interest, and fees, amounted to USD 5.513 billion in 2024, representing an increase of USD 1.430 billion compared to the previous year.

Finally, with regard to the oil sector, a net income of USD 1.749 billion was recorded, representing an increase of USD 1.047 billion compared to 2023. This level of income is in line with the surplus recorded in the oil trade balance of USD 2.827 billion from January to October 2024, which represented an increase of USD 985 million compared to the same period in 2023[1].

The recovery of the International Reserves throughout 2024 strengthened and ensured the proper functioning of the dollarization system, as well as guaranteed the provision of liquidity at the national level and payments abroad requested by depositors of the financial system and public, private, and popular and solidarity economy entities.

The Monetary Policy and Regulation Board and the Central Bank of Ecuador reaffirm their commitment to strengthening dollarization.

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[1] This result was driven by the annual increase in the value of oil exports by 11% (USD 807 million) and the annual decrease in the value of oil imports by 3% (USD -178 million)