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Ecuador Bonds Slide After Noboa Reform Setback
Brazil’s hugely successful digital payment system Pix turns five.
BY LATINVEX STAFF
Just as investor sentiment was picking up in Ecuador after the re-election of Daniel Noboa in April, a defeat in a key referendum is seen as a new setback for the young president’s ambitious reform agenda.
Ecuador’s sovereign bonds—which had been among the world’s best performers this year—fell across the yield curve on Monday, with bonds maturing in 2035 falling as much as 3.4 cents, their worst intraday decline since February, Bloomberg reports.
“The referendum result in Ecuador was a negative surprise for Noboa’s support and again calls into question the reliability of polls,” Anders Faergemann, portfolio manager at PineBridge Investments, told Bloomberg. “We see it as a temporary setback to the momentum in credit and would view any further weakness as a buying opportunity, unless the opposition manages to capitalize on the uncertainty to spark renewed protests.”
Fitch Ratings says the referendum defeat diminished Noboa’s personal political capital and could hinder alliance-building in the National Assembly to secure majority support to pass legislation.
“The referendum result compounds uncertainty over prospects for further key reform initiatives, including efforts to attract investment and fiscal measures,” it says.
Voters rejected all four government-backed proposals. The measures would have authorized foreign military bases in the country to help fight organized crime, reduced the size of the legislature, cut mandatory political party financing; and convened a Constituent Assembly. The share of “No” votes ranged from 53.1% to 61.8%, contradicting pre-referendum opinion polls and the President’s approval ratings of about 55.5%.
The likelihood of tax reform, which Fitch felt had increased following the May election results, appears to have receded again.
“While non-oil revenue mobilization and announced expenditure measures could still support consolidation next year, further deficit reduction from 2027, and the ability to close the financing gap, still depend on the approval and implementation of reforms,” Fitch says.
Meanwhile, doubts about implementation of further fiscal measures could undermine prospects for restoring international market access, the ratings agency warns.
PIX TURNS FIVE
Brazil’s hugely successful digital payment system Pix, which revolutionized the country’s banking system by extending services to the poor, turned five on Sunday.
So far this year – through October – it moved 28 trillion reais (US$5.2 trillion), more than all of last year’s 26.4 trillion, according to Central Bank data quoted by Agencia Brasil.
Pix now surpasses credit and debit cards as the preferred method of payment in Brazil. (Photo: Brazil Central Bank)
The payment system was launched in November 2020 by then-Central Bank president Roberto Campos Neto.
Pix now surpasses credit and debit cards as the preferred method of payment in Brazil, sparking interest across Latin America, Europe and Africa, where authorities are trying to understand the key to the platform’s popularity, Bloomberg reported last year.
Renato Gomes, the director of financial system organization and resolution at the Central Bank, points out that the platform has included more people in the banking system.
“On the one hand, there was this reduction in the cost of distributing money,” he told Agencia Brasil. “On the other hand, there was, let’s say, this increase in the share of customers and customer consumption and, obviously, as Pix brought a lot of competition to the payment system, there ended up being a reduction in fees.”
Recent data shows that 170 million adults and more than 20 million businesses use Pix.
CORONA BRAND VALUE GROWS
Mexico’s Corona beer brand was the only Latin American entry on Interbrand’s Best Global Brands 2025.
The Mexican brand was ranked 80 out of the top 100, with a value of $9.7 billion, an increase of 11% from last year.
As a result, Corona ranks ahead of such brands as Dior, Caterpillar, Prada, Tiffany & Co and Range Rover.
Corona’s brand value has been steadily increasing the past ten years, starting at $4.5 billion in 2016, going to $6.6 billion in 2020 and now at $9.7 billion.
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