The EMBIG Peru spread declined 11 basis points to 222 bps, while the EMBIG Latin America spread decreased 28 bps to 502 bps between July 26 and August 3, the
Central Reserve Bank of Peru (BCR) reported.
This occurs in a context in which reported indicators of manufacturing and services suggest some reduction in inflationary pressures.
In July, the EMBIG Peru and EMBIG Latin America spreads declined 16 bps and 28 bps, respectively.
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
Published: 8/8/2022