He risk country broke historical lows again and in this way Uruguay It is ranked as the best country in the area in the entire region, in a sign that inspires confidence in the market about the direction of the economy and financial stability.
The improvement of Uruguayan sovereign spread is confirmed in all indicators, but, as an example, it reached its lowest value in the Urubi (Uruguay Bond Index) that elaborates AFAP Republic, remaining at 62 basis points and equaling its best mark, reached on October 25.
Among the different indicators, the Uruguay Risk Index which measures the Uruguayan Electronic Stock Exchange (Irubevsa), which closed the week at 66 basis points, down 17 bp. only during the last week.
Meanwhile, the Emerging Market Bond Index (EMBI) by JP Morgan is located at 80 basis points, while the Credit Default Swap (CDS) In 5 years it is at 68 basis points, according to data shared by the economist Aldo Lema, who highlighted that the risk country “closed the week at historic lows.”
The lowest country risk in the region
He JP Morgan EMBI It is one of the indicators recognized worldwide and in its methodology it calculates the difference of interest rate that pay dollar bonds issued by underdeveloped countries and United States Treasury Bonds. From there it can be deduced, with data as of December 1, that the spread of Uruguay It is the lowest in the region, with the 84 basis points it reached at that time, well below the regional average of 383 and the global average of 345.
In that ranking, they complete the podium Chili (137 bp) and Peru (161), while at close levels it is followed by Brazil (200), Paraguay (204), Costa Rica (239), Guatemala (256), Dominican Republic (272), Panama (284) and Colombia (300).
On the podium of the worst in the class appear Bolivia, with a country risk of 2,092 basis points, Ecuador (2,059) and Argentina (1982), followed far by The Savior (719), Honduras (402) and Mexico (358).
What are the consequences of a country with low country risk?
He risk country It is the index that calculates the probabilities that a nation will not meet its financial obligations, mainly in relation to its debt payments. sovereign debt. That is why it serves as an indicator to evaluate the economic and financial stability of a country in comparison with others, analyzing, among other factors, the credit history, the inflation, the interest rate of your debt and exchange stability.
When lowering the sovereign spread, Investors will reduce the perception of risk about that nation and that can translate into a higher cost when seeking financing in international markets. Months ago, the economist Amparo Mercader, partner of the consulting firm PwC, ensuring that the scenario can mean “hundreds of millions of dollars of interest savings to the State per year” and highlighting the “appreciation of bonds in circulation.”
Source: Ambito
