EMBIG Peru decreased by 11 basis points (bps) to 163 bps from June 27 to July 5, the
Central Reserve Bank (BCR) has reported.
Meanwhile, EMBIG Latin America decreased by 14 bps to 409 bps in a context of lower geopolitical tensions.
In June, the EMBIG Peru and EMBIG Latin America decreased 28 bps and 44 bps, respectively.
According to the BCR, the interest rate on Peru's 10-year sovereign bonds, which decreased 27 bps between June 27 and July 5, remains one of the lowest in the region. In June, this interest rate decreased 32 bps.
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/MVB
Published: 7/11/2023