Ecuador and Venezuela, the most vulnerable countries after the fall of oil price

The collapse of oil prices caused a strong drop in bonds from emerging countries that depend on exports of crude oil, mainly Venezuela and Ecuador, because investors are nervous about the ability of these nations to pay their debts.

The spread between yields on the debt of Ecuador and US Treasury bonds, a relative measure of risk perceived by investors, soared 33 basis points in the EMBI Global index of emerging market bonds to 523 basis points. The spread of Venezuelan bonds increased 41 basis points to 1,558 basis points.

“Venezuela and Ecuador are seen as the most vulnerable, but Russia may also be at risk because of its relatively high production costs,” said Peter Marber, chief investment officer at Loomis Sayles in Boston.