The country risk —measured by the EMBIG Peru spread— decreased 6 basis points (bps) from 162 to 156 between July 17 and 24, the
In the same period, the EMBIG Latin America spread declined 2 bps from 510 to 508.
The country risk measures the ability of a country to meet its financial obligations and the implicit political risk and, based on that, receives an international credit rating.
The main consequences of a high country risk are a drop in foreign investment and lower economic growth, which could lead to unemployment and low wages.
This is an orientation index for investors, because it indicates the risk of doing business in a country is more or less high.
It should be noted that the higher the risk, the less likely projects obtain a return in accordance with funds; and the lower this index is, the more attractive the country will be to investors.
(END) NDP/MVB