* Ecuador’s government bonds have rallied after the centre-right candidate
Guillermo Lasso won the country’s
presidential election on 11 April, defeating the leftist
Andrés Arauz. Bond traders consulted by
Reuters said that the value of the country’s July 2035 bond is up 15 cents to 63.3 cents on the US dollar (close to its record high), and the July 2030 bond is up nearly 18 cents to 77.5 cents/dollar (its highest level since trading began in September 2020). In a research note cited by
Reuters, the investment bank, Morgan Stanley, noted that
“with a few supportive months ahead, including continued [International Monetary Fund] IMF co-operation, we think gains will be sustained and turn bullish”. Lasso’s victory has calmed investors concerned that Arauz – who was widely perceived as the favourite to win the election – would scrap the
September 2020 deal struck with the IMF, through which the multilateral organisation agreed to provide Ecuador US$6.5bn in credit through its Extended Fund Facility (EFF) over a period of 27 months.
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