The country risk —measured by the EMBIG Peru spread— increased 1 basis point (bp) from 157 to 158 between November 27 and December 4, the
In the same period, the EMBIG Latin America spread increased 3 bps from 458 to 461.
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