"Correa wants to sound level-headed."AND PATRICK TOLD THE CROWD" "THE NUMBER IS "BIG"-"ECUADOR BABY"
Sep 24, 2007 21:15 ET
'UPDATE 2-EXCLUSIVE-Ecuador says has funds to pay debt in 2008'
NEW YORK, Sept 24 (Reuters) - Ecuadorean President Rafael Correa said on Monday the country has enough funds to honor its international debt payments next year and could issue debt in foreign markets in 2008.
"We haven't had any problems with financing, and next year we don't see a big financing problem," Correa told Reuters in an interview during a visit to New York for the United Nations General Assembly meeting.
Foreign investors have been concerned about Correa's plans to restructure the country's $10.38 billion foreign debt and his willingness to honor the country's bond coupons.
"As a matter of fact the weight of the debt has dropped sharply," said Correa.
When asked if his government has ruled out issuing new debt next year, Correa said "we don't rule it out, but it's not something that we will lose our sleep on."
Correa's debt comments mark a change in tone from his often-aggressive stance on debt policy that has pushed down Ecuadorean debt prices since he took office in January.
The leftist president's party is expected to win a majority in Sunday's election of a popular assembly with powers to rewrite the constitution, a leading pollster said earlier on Monday.
Analysts worry that Correa could draft a new constitution to boost social spending and keep a ceiling on debt payments, which could hurt the country's economy in the long term.
"The real risk of Ecuador defaulting is not today when they have money but later when they don't have money," said Gianfranco Bertozzi, an analyst with Lehman Brothers in New York.
"Correa wants to sound level-headed. It seems he is now feeling there is nothing to be gained from being
confrontational with investors at this moment."
SOFTER TONE ON MINING
Correa also said the country could allow open pit mining if it is carried out with enough government controls. His top candidate for the assembly, Alberto Acosta, in August vowed to forbid open-pit mining, dragging down the stock price of Canadian companies operating in Ecuador.
Ecuador has no significant output of precious metals, but Canadian companies such as Aurelian Resources Inc and
Corriente Resources are exploring for gold and copper.