Equador's government bonds drop to six week low

Equador's government bond prices dropped to a six week low on Monday. The investors reacted to the outcome of Equador's presidential election, which was won by leftist economist Rafael Correa. On Sunday Correa had declared his intention to negotiate the reduction of the foreign debt. According to Correa a unilateral moratorium could not be excluded. Equador's foreign debt amounts to $11 bln. Equador is an oil producing country and currently profits from the high oil prices. With his new initiative Correa had already sent shudders through the market, but his declarations on Sunday have given no clue if this intentions are serious or just a rhetorical maneuver.

Source: Neue Z├╝rcher Zeitung





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