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country risk once again breaks historical lows

country risk once again breaks historical lows

Uruguay thus consolidates itself as the best country in the region when analyzing the different sovereign spread indicators.

Photo: Freepik

He risk country broke historical lows in several indicators and is a sign of ratification of the good direction of the economy, which in turn consolidates Uruguay as the best country in the region in the matter.

This improvement in indicators coincides with the high levels of Foreign direct investment (FDI) and an important milestone such as the increase in investment grade by Moody’s, that consolidated the best credit rating of the history of the country.

He Uruguayan sovereign spread consolidated a strong decline in the last week in the Uruguay Risk Index of the Uruguayan Electronic Stock Exchange (Irubevsa), which reflected a decline of 19 basis points in the last week and closed at 59 basis points. If analyzed on a monthly level, it accumulated a decline of 25.32% in April, which reaches 28.05% so far this year.

As for the Uruguay Bond Index (Urubi), which makes AFAP Republic, It is at 65 basis points, close to its best mark, which was 62 points last December. In turn, the Emerging Market Bond Index (EMBI) JP Morgan is at 71 basis points, while the Credit Default Swap (CDS) for 5 years stood at 55 basis points, according to the latest data collected by economist Aldo Lema.

Can Uruguay issue sovereign debt again this year?

The improvement in risk country, the index that calculates the probability that a nation will not meet its financial obligations, can lead to savings in interest debt and also promote the bonuses On circulation.

Faced with this scenario, the possibility of issuing sovereign debt in global bonds in 2024, something that was suggested weeks ago by the Ministry of Economy and Finance (MEF).

The director of the Debt Management Unit spoke along these lines, Herman Kamil, who mentioned the possibility of launching titles in pesos at a fixed rate and in Indexed Units (UI), as well as the probable reopening of the Bond Indexed to Climate Change Indicators (BIICC) and a possible new Samurai bonus in Japan.

In this regard, the economist Rodrigo Sarachaga, of Personal Sherpa, pointed out days ago that it may be a good time to issue a new global bond in Indexed Units, a title that has not been released since 2020. In addition, he mentioned the lack of long-term references, with 2040 as the most distant horizon at present.

Source: Ambito

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