The country risk indicator, measured by the EMBIG Peru and EMBIG Latin America spreads, decreased by 1 and 5 bps, respectively, from March 13 to 20, 2024, the
Central Reserve Bank (BCR) has reported.
According to the BCR, this reflected the increase in U.S. Treasury Bond yields.
The interest rate on 10-year Peruvian sovereign bonds which increased 2 bps between March 13 and March 20, 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.
(END) NDP/RMB
Published: 3/24/2024