The EMBIG Peru spread remained unchanged at 173 basis points between July 19 and July 26, the
Central Reserve Bank (BCR) has reported.
On the other hand, the EMBIG Latin America decreased by 4 bps to 410 bps, in a context of an upward revision of global economic growth for this year and high investor appetite for risk.
According to the BCR, the interest rate on Peru's 10-year sovereign bonds, which declined by 1 bp to 6.8% between July 19 and July 26, 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) RMB
Published: 7/31/2023