Peru’s country risk indicator, measured by the EMBIG Peru spread, fell from 147 to 144 basis points in July 1-8 this year, reported Monday the Central Reserve Bank (BCR).
On the other hand, the EMBIG Latin America spread fell 4 basis points due to the favorable evolution of financial markets after positive data of employment in the United States and positive data of activity in China.
Thus, Peru’s country risk has remained below the Latin America’s average that closed at 332 basis points at July 8.
Peru’s country risk has fallen 17 basis points so far this year since the 2013 closing of 161 basis points.
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.
The JP Morgan's EMBI (Emerging Markets Bond Index) is used to assess the stability and perceived risk in emerging economies.
(END) JJN/VVS/RMB
Published: 7/13/2014