Moody’s Upgrades Ecuador to B3

Moody’s has upgraded Ecuador to B3 (stable) from Caa2. The action is supported by the easing of financial difficulties owing to high oil prices and low likelihood of a switch by the government in its policy of remaining current on its accounts to implement the social agenda. However, the agency sees dim prospects of further upgrades in the medium term, citing the elimination of the oil savings fund by the new fiscal framework. “This is an issue of concern for creditworthiness, particularly given Ecuador’s traditionally weak institutions,” Moody’s says. The agency also notes that Ecuador likely registered the lowest growth rate among global energy-producers last year, in part due to a contraction in investment amid policy uncertainty.