After learning of the results of the Ecuadorian election, this indicator had a significant decline.
Ecuador had to wait about 16 months for the country’s risk index to drop below 900 points, during which time it peaked at 6,063 points.
The reason for this decline is that, as a result of the presidential election held in Ecuador on Sunday, April 11, in the second round, the candidate of the Cryo-PSC alliance, Guillermo Lasso received the largest number of votes. The event dropped 345 points on April 12, Goes from 1,169 to 824.
The Country risk is an indicator of the perception of the possibility of paying its international obligations in the markets at the international level. In other words, hope was created after the end of the Ecuadorian people.
George Calderon, rector economist at Technologico Universitario Arcos, points out that these comments should be true once Lasso accepts the leadership of the government, so there is a reaction in international markets, as well as other decisions, the legislature and the cabinet.
“Those feelings must be realized when reform begins.When it announces an economic plan, we will look at how the country’s risk works when the legislature leads to laws that need to be reformed. There should be a reduction when the law to protect dollarization is passed, which is already under discussion and who is the Speaker of the Legislature, ”he points out.
Best Country Danger in Latin America
The measurement of this indicator is mainly by the financial institution J.P. Morgans are carried out by the scales measured in each country and the weights are established. In the region, Uruguay and Peru record their country’s risk of less than 200 points.
Calderon explains that the benefits of the catastrophic fall are clearly visible at the macroeconomic level The government can borrow at low rates Further Make your bonus more attractive Because of this it will rise.
At the business level, companies can also get International credit with more accessible rates.
“The low country risk is that an Ecuadorian company can borrow cheaply overseas and it will lead to lower costs, which means the government can borrow at cheaper interest rates, so when they have to pay that debt, it pays lower interest rates and work for me. That means there is more evidence, ”he says. (I)