He Country risk continues to escalate in Ecuador, hand in hand with deep political instability and market doubts about the country’s future and that the new government is not fulfilling its obligations. He On Thursday, March 30, the measurement indicator of JP Morgan was 1,971 points, while the day before it was at 1,915 points, the Central Bank announced.

This result is the worst recorded since the beginning of the government of Guillermo Lasso, which began on May 24, 2021 with 827 points. In 2022, on October 13, an indicator of 1,945 points was recorded. And recently, on March 19, a new peak with 1950 points was reached on the 29th, at 1952. Then the indicator fell slightly, only to rise again on March 30.

The risk of this country is increasing in an important way since the last elections in February 2023 when the results were not in favor of the Government neither in the matter of the election of sectional authorities, nor in the popular consultation. Now this indicator reflected the greater nervousness of the market, after the end of the political process against President Guillermo Lasso, which was promoted by the opposition in the National Assembly and approved by the Constitutional Court.

On this topic, the director of the Central Bank, Guillermo Avellán, indicated that this indicator measures the country’s ability to fulfill its obligations to foreign countries. He asserted that the current administration made an effort to organize public finances, and as a result, the program with the International Monetary Fund (IMF) was successfully completed and the total surplus of the non-financial public sector (SPNF) was achieved. .

He further clarified that in the upcoming three years, so until 2025, there are no strong debt maturities, and the current government has the resources necessary to comply with it. So, considering the current government, there is no doubt that the obligations will be fulfilled. However, questions come with the next two periods of government.

He admitted that an increase in country risk affects the rate at which loans can be taken out. In the case of the Government, borrowing on foreign markets is excluded precisely because of the country’s high risk, while multilateral loans are expected to cover this year’s fiscal deficit.

In accordance with Jaime Carrera, from the Fiscal Policy Observatory, what the markets are currently looking at is that there is a strong possibility that there will be a removal of President Guillermo Lasso, after the verdict of the Constitutional Court. This caused a significant drop in the price of Ecuadorian debt bonds. bonds The 2030 bonds are sold at 50%, and the 2040 bonds at 30%, or 30 cents to the dollar.

For Carrera, the markets are also suspicious of what could follow the eventual removal of Lasso, as well as a possible death on the cross, which would create chaos in the country. Carrera reminded that debt bonds must be paid in 2026, and previously, in 2024, some repayments to the IMF.