As Ecuadorian protesters infuriated by rising fuel prices invaded government offices and oil fields, the president and his administration fled the capital, warning of a coup.
In a national address late Monday, Oct. 7, President Lenin Moreno said he had moved the executive branch from Quito to the port city of Guayaquil due to security threats. The president said that allies of his predecessor Rafael Correa had infiltrated protests against increases in fuel prices in a bid to topple his government.
"They are the ones behind this coup attempt," Moreno said, without providing evidence. "The looting, vandalism and the violence show that here there is an organized political intention to destabilize the government and break the democratic order."
The government of the South American nation of about 16.5 million decamped after another night in a week of unrest. Protesters in Quito damaged Ecuador's congressional building and violently entered the comptroller general's office across the street. On Monday, rioters also attacked an oil production facility, a major dairy and dozens of rose plantations. They burned police and military vehicles as security forces struggled to contain the violence.
"When I read that Moreno had left, I felt that we've been left alone, who is going to defend us?" said Susana Vega, a Spanish teacher in Quito. "This isn't a strike, this is something much more sinister."
The tumult began when the government eliminated subsidies on gasoline and diesel, a move welcomed by the International Monetary Fund and rating companies including Moody's Investors Service. Moreno reiterated Monday night that he wouldn't reinstate the fuel subsidies, which had been in place since the 1970s and which were costing the government close to $1.4 billion a year. Observers didn't take that as the final word.
"There is a non-zero risk that Moreno knuckles under pressure and rolls back the subsidy cuts," Edwin Gutierrez, London-based head of emerging-market sovereign debt at Aberdeen Asset Management, wrote in a written reply to questions. "Given the violence and protests, that risk has clearly risen."
The nation's dollar bonds due in 2028 fell 3.6 cents to 93 cents on the dollar, the biggest drop since they were sold in January 2018, sending yields up 0.65 percentage point.
This article was written by Stephan Kueffner and Aline Oyamada, reporters for Bloomberg.