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Showing posts from May, 2015

Ecuador Requiring Banks to Offer Electronic Currency Services

By Nathan Gill (Bloomberg) -- Ecuador, which uses the U.S. dollar as its official currency, will require banks to offer services tied to a government-created electronic coin.
Lenders with assets greater than $1 billion as of Dec. 31 have 120 days to fulfill the requirement, while smaller banks will get as long as a year, according to a resolution published on the Monetary Council’s website.
The new rule comes less than a year after the government asked Congress to approve the creation of the new currency with the condition that its use be voluntary. While President Rafael Correa has criticized the nation’s use of the greenback because it hampers officials’ ability to offset a drop in the OPEC nation’s crude exports with monetary stimulus, he has said the government has no plans to switch away from the dollar.
“The new institutional vision of the central bank determines as a strategic objective financial inclusion and the modernization of payment systems,” the council said in the reso…

South America’s Commodity Rout Spurs Public Spending on Housing

By Nathan Gill (Bloomberg) -- Enrique Perez, who’s been building homes for most of his life in Ecuador, is finally going to make one for himself.
Perez is an unlikely beneficiary of the plunge in crude prices. That prompted Ecuador, an OPEC nation, to offer mortgage subsidies to people like Perez, a construction worker.
Ecuador joins Chile, Colombia and Peru in boosting spending on housing -- a politically popular move -- to revive their economies bruised by the worst commodities rout in four years. The Latin American nations are rolling out everything from changes in tax and mortgage laws to increases in infrastructure spending and subsidies for builders.
“The Ecuador government’s idea was to generate a massive housing program focused on middle- and lower-income levels to help boost the economy,” Mario Burbano de Lara, strategic director of Ecuador mortgage lender Mutualista Pichincha, said in an interview. “They saw a fiscally difficult year coming and wanted a new motor for the ec…