Ecuador’s country risk was set at 1,921 points on Tuesday, November 21, 133 points lower than the one recorded on November 15 when it reached 2,054 points, but still much higher compared to the 1,757 points recorded when it won the presidential election. elections Daniel Noboa Azín.

Country risk oscillated at high scores, representing the perception of a high risk that Ecuador will default on its debt obligations.

In the days leading up to the election, country risk has skyrocketed, according to analysts, as the country has a complex panorama of a large deficit that could reach more than $5 billion, as well as governance problems. Thus, in the days before the second round of elections, the indicator was at 1,839 points, but when it was known that Daniel Noboa Azín was the winner, it dropped to 1,757 points. Not a very significant drop, but it reflected some kind of confidence.

However, in the coming days, the newly elected President Noboa’s statements to the multilaterals, in which he spoke of the need for resources and that if they are not obtained (perhaps through a bridging loan), there will be possibilities of a fall in default This stirred the market and the levels rose above 2000 points. Additionally, this increase was linked to the alliance of President Noboa’s political group in the National Assembly with the Correísta group and the Social Christian Party. Correismo has a controversial history regarding its compliance with debt payments.

According to Ramiro Crespo, president of Analytica Securities, the cancellation of the appointment of Minister of Economy Sariha Moya, who will now go to the National Planning Secretariat (Senplades), shows that the president listened to the markets about their doubts about this profile and therefore it would be a factor in the current decline.

On the subject of events in the Assembly, he explains that the market may understand that there is greater control, but it remains to be seen how the distribution of commissions will end. He believes that, for example, starting to talk about an amnesty for Ricardo Patiño would go down very badly on the market.

He assures that the new minister, two ministers and the undersecretary for debt are key appointments at this time. He explains that Ecuador must be serious about its debt and not fall into buyout operations, as happened in Correismo, which ended up costing it more than what it saved, because it had to go to other more expensive markets. financing, whose access was closed on the international market.

Meanwhile, Alberto Acosta Burneo, editor of the publication Weekly analysis, believes that the fact that there is no economy minister yet creates uncertainty in the market, but it is probably understood that the president recognized that the first option is not the appropriate profile. Remember that it was Moya who accompanied President Nobo on his visit to Washington, and the sensation he caused was that he had no important participation, spoke little and therefore did not fulfill the role that ministers normally play in presenting a serious plan and a request that supports him.

Furthermore, Acosta believes that the improvement of the indicators would also have something to do with the development of the price of crude oil. It is about the fact that there were significant price increases on Monday for two consecutive days, although this Tuesday the price of oil fell slightly again ($77.62). This comes as producers from the Organization of the Petroleum Exporting Countries (OPEC) discuss deepening supply cuts due to slowing global growth.

Politically, there is still a lack of certainty for Acosta due to the Government’s alliance with the PSC and Correismo. There is no majority in any committee and everything is related to agreements with political actors. In any case, since the ruling party has taken over the Commission for the Economic Regime and the Commission for Economic Development, it guarantees the sending of its laws, which could lead to the implementation of the debt payment law.

In any case, he finds it worrying that certain investment banks such as Barclays insist on a way to avoid falling into default It would be if Ecuador took money from international reserves to buy bonds. For Acosta, this would attack dollarization and the financial system. It is worrying because this operation involves: on the one hand taking money from depositors, but this would leave that sale open to other types of measures such as what happened in the belt. He explains that it is not too problematic for investors to take these harmful measures, because what they are interested in is collection. However, for the country it would.