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(Bloomberg) — A socialist economist feared by bond investors won the first round of Ecuador’s presidential election, and will face either an environmentalist or a conservative banker in a runoff after an unexpectedly close fight for second place.

© Bloomberg Andres Arauz, presidential candidate for the Democratic Center (CD) party, center, departs after casting a ballot at a polling station during the first round of presidential elections in Quito, Ecuador, on Sunday, Feb. 7, 2021. Polls are open in Ecuador in an election that will decide whether the country turns its back on the U.S. and restores an alliance with socialist regimes in Cuba and Venezuela.

Andres Arauz, who rejects austerity measures and attacked Ecuador’s deal last year with the International Monetary Fund, got 31.5% of votes cast, according to the quick count published by the electoral authority late on Sunday.

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The race for second place is still too close to call, after a surprisingly weak performance by the conservative Guillermo Lasso. In the fast count, Yaku Perez, from the indigenous party Pachakutik, got 20.04%, giving him a wafer-thin lead over the conservative Lasso, who got 19.97%.

Polls had mostly predicted that Lasso would comfortably make it to the second round. The possibility of a runoff between two leftist candidates is likely to trigger a selloff in the nation’s dollar bonds on Monday, said Siobhan Morden, head of Latin America fixed income strategy at Amherst Pierpont in New York.

Perez opposes mining projects and wants to renegotiate Ecuador’s debt, while Lasso backed the IMF deal and wants the country to have warm relations with Washington. Both candidates expressed confidence that they’d made it to the second round.

Investors will “unwind” the optimism they felt over the possibility of Lasso prevailing in the second round, Morden said, in reply to written questions. Although Perez appears to be moderate, his “anti-mining platform would be detrimental for growth,” she said.

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Once the final vote has been tallied, either Perez or Lasso will face Arauz in the second round, scheduled for April 11.

Vote counting advanced at slow pace, with just 26% of the ballots processed more than five hours after polling stations closed.

Acrimonious Relationship

The campaign for control of Ecuador, an oil exporter and world-leading producer of bananas, shrimp, and the balsa wood crucial for wind-turbine rotors, has become a battleground of international interests.

Arauz, 36, is a protege of exiled former leader Rafael Correa, who allied the country with the socialist governments of Venezuela and Cuba and who often had an acrimonious relationship with Washington.

Arauz has pledged to provide $1,000 to 1 million needy families, and says he’ll avoid austerity measures of the kind Ecuador agreed to as part of an agreement with the IMF last year.

Lasso, 65, says he’d boost the monthly minimum wage to $500, from $400. Perez has called for negotiations with creditors to extend maturities and lighten the burden as the nation recovers from the economic slump.

(Updates with analyst reaction in 4th paragraph.)

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