He Ecuador’s country risk has continued to rise over the past two weeks, following the announcement of the death cross by President Guillermo Lasso. While on May 16, the day before the decree by which the president applied crucifixion, the indicator was 1,773 points, after the announcement of that constitutional figure it rose to 1,832 points and for this June 1 reached 1912 points. In other words, there was an increase of 139 points.
In accordance with Alberto Acosta Burneo, editor of Análisis Semanal, this indicator from Ecuador shows that the financial market is completely closed to the country. And he comments that the variations that occur reflect instability and political uncertainty.
The country risk of Ecuador is approaching the threshold of 2000 points
Additionally, the country will not be able to access markets until country risk is significantly reduced. This could happen only in 2025, depending on the election results. In other words, in the event that a country committed to pay its obligations, it won. Otherwise, if the next government says ‘I’m not going to pay’, then the risk simply won’t go down and there won’t be this important source of external funding, he says.
He believes that the interim government that is preparing to be elected, on the other hand, does not have to pay significant amortizations, so its position on the debt is not as crucial as that of 2025. In any case, he believes that in the coming months the country’s risk will continue to fluctuate, but always high and vary depending on the daily news.
Report to the nation: Guillermo Lasso evaluates his two years in government with these figures
That’s what Acosta Burneo remembers In its latest report dated May 24, the risk assessment agency Fitch Ratings lowered the credit outlook for Ecuador from B- “stable” to B- “negative”.
Indeed, Ficht believes Ecuador’s credit risks are high due to political uncertainty. In addition, it does not rule out the possibility that instability and uncertainty will last longer than expected. For Acosta, this change represents a more complicated environment in terms of debt payments.
Source: Eluniverso
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