LatinNews Daily - 09 February 2023

In brief: Ecuador’s country risk rises

* Ecuador’s country risk has risen in the wake of the 5 February referendum and local elections, which both delivered blows to President Guillermo Lasso’s centre-right government. According to the central bank (BCE), country risk increased from 1,120 points on 5 February to 1,415 points on 6 February, and rose again to 1,514 points on 7 February. The rise in country risk, which measures the uncertainty associated with investing in a country and is widely used as an indicator for debt default risk, could drive up borrowing costs for the government. The international credit ratings agency Fitch released a statement on 7 February noting that Lasso has lost political capital following the referendum defeat, and predicted increasing governability challenges. Fitch said that the prospects of Lasso passing his promised economic reforms are now “remote”, and warned of a risk of further social unrest due to pressure on the government from the umbrella indigenous organisation Confederación de Nacionalidades Indígenas del Ecuador (Conaie).

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