Rafael Correa, Ecuador's combative leftwing president, is keeping financial markets guessing on whether he will make an interest payment due on Monday on an international bond issue his administration claims is illegitimate.

The president, a US-trained economist, is likely to find it ever more difficult to pay, even if he wanted to. The oil prices collapse has driven the Opec nation to its first trade deficit in 15 months and remittances, which accounted for 7 per cent of gross domestic product last year, have slumped. "We feel that the government has entered a slippery slope that will ultimately lead to default, as low oil prices take a toll on revenues and risks over Ecuador's willingness to pay are compounded by liquidity shortfalls," said Patrick Esteruelas, a Latin America analyst for New York-based Eurasia Group.