March is the worst month for country risk in Ecuador. When the benches of the Union for Hope (UNES) and the Social Christian Party (PSC) filed a request for the impeachment of the President of the Republic Guillermo Lasso, the country’s risk rose to the highest level until then (1950 points) in two years and ten months of government. Now that the Constitutional Court is analyzing whether that trial should be transferred or not, that risk is growing even more and on Tuesday, March 28, it was 1,952 points.

This indicator has remained above 1,000 points since the national strike led by the Confederation of Indigenous Nationalities of Ecuador (Conaie) in June 2022. So far in 2023, it has fluctuated between 1,043 and 1,952, according to data released by the Banking Center of Ecuador.

Ecuador’s country risk exceeds 1000 points due to protests

Country risk, as measured by investment bank JP Morgan, measures the market’s perception of whether a country will default on its foreign debts.

The political instability created by the intention of the members of the assembly to depose President Lasso in the political process pending the decision of the Constitutional Court is one of the factors that analysts believe are contributing to this new escalation of the country’s risks. Added to the price of oil. U.S. WTI, Ecuador’s benchmark, fell to less than $70 a barrel in mid-March and has recovered to around $73 this week, according to international reports.

How does the country’s high risk – which has already exceeded 1,500 points – affect the Government, companies and citizens?

High country risk affects access to international capital. International resources become more expensive, because this risk increases the interest rate.

With 1,952 country risk points, Ecuador is close to the level of Argentina, where this indicator hovers around 2,500 points. And in the region they are surpassed only by Venezuela, whose country risk is higher than 36,000 points.