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After 21% Rout, a Truce in Ecuador Won’t End Pain in Bonds

  • President Lasso reached an accord with protesters on Thursday
  • Subdued rebound in bonds points to deeply cautious investors
Updated on

Life is getting back to normal in Ecuador after protesters agreed to end a wave of violent demonstrations that had paralyzed much of the country. Don’t expect the nation’s bonds to return to their former level any time soon though.

Even after President Guillermo Lasso survived an impeachment attempt last week, investors remain worried that the former banker won’t last until his term ends in 2025, triggering another debt crisis. Their jitters are understandable. Ecuador has defaulted eleven times in less than 200 years of independence, the last one just two years ago.