The Irubevsa rate is at 99 basis points and has increased by 33.78% so far this month, given possible changes to social security.
He country risk rose 33.78% so far this month, in the heat of the proximity of the plebiscite that drives the PIT-CNT against the social security reform, about which political leaders and economic agents warned that it would generate a strong impact on the Uruguayan economy.
He Irubevsa, that elaborates the Electronic Stock Exchange of Uruguay (Bevsa) closed Friday at 99 basis points and, although the sovereign spread remains among the lowest in the region, it is above the 74 basis points with which it closed August and even further from the 59 it reached in April.
The country risk thus resumes its upward trend and returns to July levels, when it closed at 95 basis points and even reached a peak of 114.
The possible impact of the PIT-CNT plebiscite
Both the government and economic agents warned that the possibility that the PIT-CNT plebiscite is approved, a scenario that the polls are far from ruling out, would lead to a loss of investment grade and that could lead to the sovereign spread rising to 200 basis points, with the consequent fall in the Uruguayan bonds.
From the Executive, the director of economic policy of the Ministry of Economy and Finance (MEF), Marcela Bension, He warned that there are “many queries from investors and risk rating agencies on the subject of the plebiscite.”
“If it is approved, they will double or significantly increase the cost of lending us money and that will have an impact on all the companies that are currently paying the minimum.” risk premium precisely because the rating of Uruguayan debt is at the highest level in history,” warned Bensión and clarified that this “will generate an increase in taxes and unemployment.”
Meanwhile, since the Chamber of Commerce and Services of Uruguay (Ccsuy), which brings together companies that together employ more than 60% of the country’s workers, its president Carlos Matyszczyk He pointed out that with the eventual approval “the deficit will increase due to the prohibition of individual savings and the consequent loss of the investment grade of foreign debt.”
Source: Ambito
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