(Bloomberg) -- Ecuador bonds led gains among emerging-market peers Thursday after the nation reached a deal with the International Monetary Fund for a four-year loan of about $4 billion. 

Notes due in 2030 jumped 1.5 cents to 53.2 cents on the dollar, the highest since June 2022, according to indicative pricing data compiled by Bloomberg. The staff-level agreement, which still requires approval from the IMF board, provides liquidity amid a series of crises weighing on President Daniel Noboa’s short time in office.

The deal is designed to help the nation to remain current on its $16 billion in outstanding bonds. A previous $7.5 billion IMF deal that ended in December 2022 allowed the South American nation to move forward with debt restructuring and was the first Ecuador completed successfully in more than two decades. 

“This is fantastic news for Ecuador,” said Ricardo Penfold, a managing director at Seaport Global in New York. “The country needs to stick to the fiscal consolidation.” 

But the country has struggled to rein in public spending and raise oil output. Now Noboa is fighting an internal war on drug gangs and struggling to meet government spending requirements as drought has severely reduced hydroelectric power generation.

Still, bonds have returned 60% so far this year as market-friendly Noboa banked on his popularity to raise taxes and pledge to reduce the fiscal deficit. Government officials had been expecting to reach deal with the fund this months since Noboa’s visit to the US in March. 

Noboa, 36, was elected to serve out the term of Guillermo Lasso, who dissolved parliament to avoid impeachment in mid-2023, triggering snap elections. His bid for reelection next year received a shot in the arm on Sunday, when voters approved nine of 11 referendum questions related to security. Two economic reform proposals failed to pass.

--With assistance from Vinícius Andrade.

(Updates with bond move and context starting in first paragraph.)

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