Andina

Peru: Country risk remained at 201 basis points

16:47 | Lima, Nov. 28.

The EMBIG Peru spread remained at 201 basis points, while the EMBIG Latin America spread rose 2 bps to 469 bps between November 16 and 23, the Central Reserve Bank (BCR) reported.

According to the BCR, this result was influenced by the restrictions implemented in China to isolate COVID-19 outbreaks.

The interest rate on Peruvian 10-year sovereign bonds, which decreased 7 bps between November 16 and November 23, remains one of the lowest in the region.

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: 28/11/2022