The EMBIG Peru spread (Peru's country risk) increased 7 basis points to 233 bps, while the EMBIG Latin America spread rose 22 bps to 525 bps between June 22 and 28, the
Central Reserve Bank (BCR) reported.
According to the BCR, this result came in a scenario with expected increases in interest rates around the globe.
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.
The index is measured based on the difference between the spread of Peru sovereign bonds over yield of U.S. Treasury bonds.
(END) NDP/RMB
Publicado: 3/7/2022