About this work
Jonathan Fortun of the IIF told Bloomberg Línea that the Ueno Bank collapse and Santiago Peña's resignation weaken Paraguay's image as free of political and supervisory risk, so markets will demand a higher risk premium until responsibilities are clarified and succession is orderly. His base case is an orderly resolution with a stabilizing guaraní, though a return to BBB style pricing looks difficult. He flagged that a debt financed bailout of public deposits, about US$830 million or 1.3% of GDP, could push the outlook to negative.