Rafael Correa, Ecuador's Chavez-loving, has decided to default on a $30 million interest payment on $500 million in sovereign bonds, despite cash reserves of $5.6 billion. While bondholders have recourse, this is a very troubling decision by a US educated President in a country that is entirely dollarized, especially as Correa seems to have lined up funding from Cuba, Bolivia, Venezuela and Iran.
I thought that this was a very good article on this matter in the Financial Times.
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