Ecuador, which defaulted on $3.2 billion of its foreign debt four years ago, is planning to tap global credit markets this year as demand for higher-yielding assets drives down borrowing costs, Standard & Poor’s said.
Annual inflation in Ecuador, which uses the U.S. dollar as its official currency, was the fastest in more than two years in October, led by increases in food and services, the National Statistics and Census Institute said.
Ecuador’s President Rafael Correa , who in 2008 called bondholders “true monsters,” is reviewing proposals from banks to sell bonds and is seeking to lure private investors to finance infrastructure and energy.
Ecuador will probably tap the nation’s pension fund and seek a loan from China next year to help finance its estimated $2.7 billion budget deficit, according to Erich Arispe , an analyst at Fitch Ratings.
Ecuador signed a $2 billion loan with China Development Bank Corp., its second in less than a year, as the Asian nation seeks to secure energy and commodities supplies to meet demand in the world’s second-biggest economy.