Peru’s country risk indicator, measured by the EMBIG Peru spread, fell in average terms in March 17-24 remaining below the regional average, the Central Reserve Bank (BCR) reported Saturday.
According to the EMBIG Peru spread, the country risk indicator fell from 205 to 192 basis points.
Similarly, the EMBIG Latin America spread decreased 26 basis points, amid signals coming from the Federal Reserve System, which reduced expectations to raise interest rates and how quickly it would.
The country risk measures the ability of a country to meet its financial obligations and the implicit political risk, and based on that, the country 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 that 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 will obtain a return in accordance with funds; and the lower this index is, the more attractive the country will be to investors.
(END) JCC/JCC/RMB
Published: 3/28/2015