Ecuador Bonds Plummet as Runoff Looms Between Noboa, Gonzalez

Ecuador's government bonds plummeted following a tightly contested presidential election that resulted in a runoff between incumbent Daniel Noboa and leftist challenger Luisa Gonzalez on April 13. Both candidates received around 44% of the votes, leading to increased market uncertainty and significant declines in the country's sovereign bonds, which fell by up to 10.6 cents on the dollar. Analysts expressed concerns about Gonzalez's potential presidency, particularly regarding her party's history of debt default and reluctance to service external debt. Noboa, favored by investors for his tough stance on drug violence and economic management, now faces a challenging second round, especially with the potential influence of third-place candidate Leonidas Iza. The political fragmentation and lack of a clear majority in the National Assembly complicate coalition-building efforts, raising further concerns for financial markets. Investors remain cautious as the possibility of a governance shift looms, impacting Ecuador's access to international capital markets.