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Rafael Correa is looking for a haircut |
Rafael Correa, Ecuador’s populist left-wing president, who was inaugurated on January 15, has been threatening to default on repayments of the country’s $4.13 billion of commercial external debt. He is also pushing for a haircut on this debt of about 75% (the same level as Argentina forced on bondholders in 2005). However, it is believed that Argentina recently told Correa’s government that the circumstances of his country, which is awash in petrodollars, is totally different from that of Argentina when it defaulted on and subsequently restructured its debt.
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