Ecuador president backs down on tax

President of Ecuador Gustavo Noboa has backed down from his threat to ignore a ruling by the country's Constitutional Tribunal against his government's recent tax increase.

During Independence Day celebrations, Mr Noboa said he would repeal the 2% sales tax rise, introduced by presidential decree in June, after the tribunal ruled it was unconstitutional.

But Mr Noboa warned he may cut funds from social programmes to make up for the lost revenue, which he said were needed to meet the conditions set by the International Monetary Fund for a loan agreed in April.

Officials had originally said the government would ignore the ruling because they believed it could threaten Ecuador's stability and harm its international credibility.

From the newsroom of the BBC World Service