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Ecuador’s Dollar Bonds Trade Weaker; Protests Erupt as Nation Scraps Diesel Subsidies
September 17, 2025
Ecuador’s President Daniel Noboa announced the elimination of the state diesel subsidy, reversing his campaign promise not to touch it due to inflationary risks. The controversial decision will be accompanied by measures such as financial aid for families and subsidies for public transport to cushion the impact. The move has sparked strong backlash from indigenous groups, unions, and social organizations, who argue it will disproportionately affect farmers, transport operators, and working-class households reliant on diesel-powered machinery. Former Confederation of Indigenous Nationalities of Ecuador (CONAIE) leader Leonidas Iza linked the measure to IMF-driven austerity and US influence, calling it “economic terrorism” against Ecuador’s poorest.
Earlier in June, the country had reached a staff-level agreement with the IMF for a $1bn loan boost. Protests have emerged with heavy goods transporters already blocking roads. The United Workers’ Front also announced demonstrations, and opposition lawmakers pledged to summon ministers to explain the IMF-aligned policy. Meanwhile, Noboa temporarily moved the presidency to Latacunga. Political observers note that memories of massive protests in 2019 and 2022 are still afresh, with the country potentially facing the risk of escalating unrest which could undermine Noboa’s political goals.
Ecuador’s dollar bonds traded weaker by 1-1.5 points with its 5.5% 2040s down to 68.8 cents on the dollar, yielding 8.7%.
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