Peru’s country risk fell 12 basis points between October 6 and 13, from 185 basis points to 173 basis points, the Central Reserve Bank (BCR) reported.
Likewise, the EMBIG Latin America spread fell by 2 basis points to 400 over the same period.
According to the issuing entity, this result is part of a context of reduced risk aversion due to the progress of negotiations on the US debt limit.
In addition, this means that the EMBIG Peru spread remains below the regional average.
Country risk measures a country’s ability to meet its financial obligations and implicit political risk and, on this basis, receives an international credit rating.
The main consequences of high country risk are lower foreign investment and lower economic growth, which could lead to unemployment and low wages.
This is a guiding index for investors because it indicates that the risk of doing business in a country is higher or lower.
It should be noted that the higher the risk, the less likely the projects are to obtain a return in line with the funds; and the lower this index, the more attractive the country will be for investors.
The index is measured based on the difference between the spread between the Peruvian sovereign bond spread and the yield on US Treasury bonds.
(FIN) NPD / RMB