(Bloomberg) -- Ecuador’s central bank made a rare intervention in politics after both presidential candidates alarmed investors by pledging to spend a chunk of the nation’s international reserves. 

Daniel Noboa, a wealthy businessman, and socialist candidate Luisa Gonzalez, may not agree on much, but they both want to tap Ecuador’s $6 billion reserve pile to fund their spending plans. 

Central bank chief Guillermo Avellán warned that this would cause a risky drop in the amount of liquidity available to the central bank, which overseas the nation’s dollarized financial system. The government already owes the bank several billion dollars, he added. 

“It is worrying that presidential candidates have publicly announced their intention to resume financing from Ecuador’s central bank to the central government without having first considered that a debt of more than $6.575 billion still exists,” Avellán said, in a statement dated Wednesday. “We think that, once this door of central bank financing is opened, it will be very difficult for successive governments to close it.” 

Bondholders initially welcomed Noboa’s victory in the Aug. 20 first round and polls that showed the pro-business candidate would win the Oct. 15 runoff. But that optimism faded earlier this month when he said he would channel $1.5 billion of reserves to combat the impact of the El Niño weather pattern, which is expected to cause catastrophic flooding in coastal areas.

Read more: Ecuador Bonds Slump as Frontrunner Floats Tapping Reserves

In a statement published Thursday, the International Monetary Fund also expressed concern about financial risks, though it didn’t mention the candidates’ comments. 

“While dollarization provides an important anchor for the Ecuadorian economy, systemic liquidity risks are high due to the limited capacity of the central bank to provide liquidity,” the fund said in a statement following an assessment of Ecuador’s financial stability. 

The nation’s dollar bonds due 2030 fell 0.6 cent to 51 cents in Thursday trading.

Banana Empire

Noboa, 35, scion of a family banana empire, led Gonzalez, 45, by nearly 10 percentage points in one recent poll. Gonzalez is an ally of former President Rafael Correa, who ran up most of the government’s existing debt with the central bank.  

Noboa’s comments undermined market enthusiasm for his likely win, given the large difficulties to repaying Ecuador’s $16 billion in outstanding debt, said Siobhan Morden, head of Latin America fixed income strategy at Santander.

“It is difficult to be overly optimistic considering the populist overtones and no obvious commitment to a medium-term debt repayment plan,” that could renew market enthusiasm for Ecuador’s bonds, Morden said in a note.

--With assistance from Maria Elena Vizcaino.

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