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ECUADOR - Finance

Guillermo Avellán Solines

General Manager, Central Bank of Ecuador


Guillermo Avellán Solines graduated in Management and Economics from the University of Richmond. He holds a master’s degree in Economic Analysis from Barcelona Graduate School of Economics. He was Research Director at Fundación Ecuador Libre; Director of Studies and Projects of the Chamber of Commerce of Guayaquil; Market Risk and Liquidity Analyst at Banco Bolivariano; Corporate Banking Analyst at Citibank Ecuador. He was a professor and researcher at Universidad de Especialidades Espíritu Santo and at Humane Instituto de Negocios. Since June 2021, he holds the position of General Manager of the Central Bank of Ecuador.

"In the past year, the Central Bank of Ecuador has restored its institutional strength and laid the foundations to consolidate monetary stability while guaranteeing its autonomy."
TBY talks to Guillermo Avellán Solines, General Manager of the Central Bank of Ecuador, about the story of the economy, the Bank’s main functions, and goals for the coming years.
What is the role of the BCE in the Ecuadorian economy?

Since early 2000, the Central Bank of Ecuador (BCE) has been the custodian of dollarization. After the Congress passed the Law in Defense of Dollarization in May 2021, the BCE became the fiscal, financial and depositary agent of public resources; it ensures the availability of cash nationwide as well as manages the payment system and the country’s international reserves. In the past year, the Central Bank of Ecuador has restored its institutional strength and laid the foundations to consolidate monetary stability while guaranteeing its autonomy, with the support of multilateral organizations and foreign Governments, such as the IMF, the Inter-American Development Bank, the World Bank and the Treasury Department. Among Central Bank of Ecuador´s main functions are to:

  • Implement policy in the monetary field, to promote the sustainability of the monetary and financial system
  • Act as a fiscal, financial and depositary agent of public resources
  • Preserve and manage the international reserves and other assets of the Central Bank of Ecuador
  • Manage the central payment system and control the means of payment
  • Ensure the availability of cash nationwide based on demand
  • Act as a centralized securities clearing and settlement depository
  • Conduct and publish economic research, means of payment and macroeconomic statistics
  • Contract external loans for the financing of the balance of payments and meet liquidity needs
  • Acquire non-monetary gold from the extraction of small and artisanal mining in the national market
  • Prepare analysis reports of the Central Government Budget Proforma
How has the Ecuadorian economy evolved since you took position in 2021?

In 2021, the Ecuadorian economy grew by 4.2%, exceeding all previous forecasts. Although the 2022 forecast was reduced from 2.8% to 2.7% due to the strikes that took place in June, Ecuador’s GDP grew by 3.2% in the third quarter of 2022 compared to the same period in 2021, showing a recovery in economic activities. This growth was primarily driven by household consumption, which have exceeded levels prior the COVID-19 pandemic and reached a historical record in real terms, making it a fundamental component for the sustained recovery of the economy as it represents more than 65% of the GDP. Another key factor in the recovery of the Ecuadorian economy, has been the good performance of non-oil exports that grew in 17% in 2022. Among the most significant industries that stimulated this increase is shrimp and mining products. Thus, Ecuador’s 2022 economic growth will be between 2.9% and 3.1%. According to our more recent forecast, the Ecuadorian economy will grow 3.1% in 2023, which doubles the average growth rate of the region. Furthermore, until recently, the Central Bank of Ecuador had faced institutional and liquidity challenges, which worsened due to the effects of COVID-19. In March 2020, the most critical moment of the pandemic, the international reserves of the Central Bank registered levels below USD 2 billion, putting Ecuador’s dollarization at risk. Nevertheless, by January 2023, the international reserves reached their all-time high of more than USD 9.3 billion, covering 100% of deposits of public and private financial entities, which guaranties the operations of its customers. In addition, after 20 years, Ecuador has successfully completed a two-year program with the International Monetary Fund. In 2020, the Republic of Ecuador reached an Extended Fund Facility (EFF) agreement with the IMF for USD 6.5 billion. This Facility aimed to help stabilize the economy, strengthen fiscal and debt sustainability, consolidate dollarization, expand the coverage of social assistance programs to protect the vulnerable, promote a transparent and more efficient management of public resources, and lay the foundations for sustainable and inclusive growth.

In which sectors do you see more opportunity of growth in the country?

The BCE has estimated that the four industries will register the highest growth rates in 2023, including oil and mining (7.3%); fishing activities (5.9%); shrimp fishing (5.5%); and construction (3.5%). Regarding these four sectors, it is important to point out that the oil industry is expected to have the highest growth rate due to a relevant increase in oil production related to the exploration of new wells. Also, the shrimp sector is one of the most resilient and innovative industries in the Ecuadorian economy that has expanded due to the development of new products and access to new international markets. Finally, the mining sector has a great growth potential enabling an export consolidation process.

In 2022 there has been an increase of 116% in the number of operations and 51% in the amount compared to 2019 in online transactions. What factors have led to this increase?

In the last three years, the use of electronic payments in Ecuador has significantly increased among citizens since they are more secure and efficient compared to traditional payment methods, especially due to the pandemic lockdowns. The Monetary Board and the BCE have implemented important reforms to promote digital payments in order to reduce the use of cash on a national scale. Among the main factors that have led to this increase, the BCE proposed the removal of the USD 0.22 fee for receiving interbank transfers. In addition, we also established that utility bills over USD 76 must be paid through digital channels. These reforms have been accompanied by valuable efforts of private financial institutions to digitize their products and services. Our commitment is to continue working on reforms that promote digital payments as well as implement a monetary education program that explains the benefits of the digitization of financial services for households and businesses in our country.

What role does the MIES secure payment plan play in this digitization and how is said digitization being promoted from the BCE?

In February 2022, the Ministry of Economic and Social Inclusion (MIES) and the Central Bank of Ecuador signed a cooperation agreement in order to promote and strengthen financial inclusion and education of the beneficiaries of monetary transfers provided by the Ministry. It is important to highlight that digital payments were very well received by the beneficiaries of the Human Development Transfer Program. In fact, in 2022, the number of electronic transfers for this social benefit was six times higher compared to the number registered in 2019. This agreement allowed both institutions to implement strategies and programs that increase access and use of financial services and products for vulnerable families and improve their standards of living.

How is the BCE promoting international best investment practices to reduce country risk?

The BCE has taken various action in this matter. For instance, in October 2022, the Federal Reserve Bank of New York granted the BCE access to a FIMA Repo Facility of USD 1 billion for exclusive central banking operations. This facility will allow the BCE to access liquid resources, in periods of liquidity shortages. The BCE has negotiated liquidity facilities with recognized international monetary institutions, such as the Bank for International Settlements (BIS) and the Latin American Reserve Fund (FLAR). In fact, we doubled the contingent liquidity line with the BIS, from USD 420 million to USD 840 million. In addition, we are working with FLAR to be granted a USD 200 million liquidity line during this year. These types of facilities strengthen the financial capacity of the BCE to respond during economic downturns. It is important to highlight that these facilities do not represent public debt. Finally, the World Bank is conducting a technical evaluation on the BCE’s Reserve Management Division. This program will also train our staff in order to incorporate the best international practices on investments for central banks.

What steps is the BCE taking to implement the monetary education plan for the Ecuadorian population?

The Central Bank in 2022 launched an educational series called Economía Tricolor (in reference to the three colors of the national flag). The main goal of this initiative is to promote economic and monetary education and inform citizens about the BCE’s services and products. We are planning to broadcast the series on national television in the near future. As part of this initiative, we also launched Economía Tricolor’s website including editorials written by central bank authorities and staff, as well as research articles and papers published by multilateral organizations. The BCE also started a new program which consist of site visits to schools, and universities. Additionally, we are redesigning our museums in Quito and Cuenca, aiming to strengthen Ecuadorian families’ understanding on financial concepts and products in order to facilitate their decision-making and contribute to their well-being.

What are the main objectives of the BCE from now to 2025?

The BCE will negotiate new liquidity facilities and double the access to credit letters issued by international financial institutions to facilitate imports in the public sector. We will also improve the bank’s policy on the International Reserves management. We will continue to promote the non-monetary gold commercialization program by strengthening the current policy to improve the certification process and incorporate a new sales initiative. In addition, in coordination with the Monetary Board and with the support of the Inter-American Development Bank (IDB), we are working on a project to promote a Real-Time Gross Settlement (RTGS) system for low-value transactions to reduce the use of cash and boost financial inclusion. Furthermore, the Central Bank of Ecuador is working on the renewal of our Centralized Security Depositary (CSD) system to implement the best international practices and promote private investments in Ecuador’s stock market. Moreover, we will build new numismatic museums in Cuenca and Guayaquil to expand monetary education and to communicate the role of the BCE in a dollarized economy. We are convinced that a solid monetary framework is a key component for achieving inclusive growth and generating quality employment in our country. Therefore, our administration is fully committed to consolidate monetary stability that guarantees well-being for future generations.



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