Ecuador Labeled the Riskiest Latin American Country for Investors

godking
11 July 2005 6:00am

Ecuador became this week the riskiest country in Latin America, according to JP Morgan Emerging Markets Bond Index, EMBI, with a 799 basic points rating.

Doubts about Ecuador´s sustainability of future foreign debt payments, plus the recent Argentine rescheduling process, have shot up the risk country factor, which measures the difference between a sovereign bond risk and US Treasury bonds.

Ecuador´s risk rate has been gradually increasing after having reached 600 points last March when the political dispute over the Judicial branch ended with the ousting of Ecuadorian president Lucio Gutierrez.

Ecuador, which has had recurring political problems and financial problems, adopted the US dollar as the local currency in 2000, but apparently to no avail since government finances continue in the red.

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