JP Morgan: Peru’s country risk rises, but remains the lowest in the region

The investment bank JP Morgan, one of the oldest financial services companies in the world, gave Peru a country risk score of 1.43 during its last session on Friday.

This represents a rise of three basis points compared to the previous day, according to the EMBI + Peru calculated daily by the stock market observer.

However, it should be noted that our country maintains, with 1.43 percentage points, the lowest country risk in the region, followed only by Mexico (2.11 points) and Colombia (3.14 points).

Precisely, the Ministry of Economy and Finance (MEF) This week, it finalized the issuance of its first social bond in euros for a total of 1,000 million, at a coupon rate of 1.95% and with a new reference to 15 years, maturing in 2036.

This is in line with the report presented by JP Morgan just two weeks ago on the political context in Chile, where the leftist presidential candidate Gabriel Boric, in the opinion of the investment bank, “seems to have moderated his speech,” taking as an example the Peruvian President Pedro Castillo.

“Foreign investments tend to have a more positive vision based on regional examples of presidents who have come to power with radical programs but who, based on the impact they have on macro-financial variables, are forced to moderate. In our opinion, this is a key element of why investors believe that the market could have overreacted to the current political scenario, ”said JP Morgan in its report.

JP Morgan: What is EMBI + Peru?

The indicator EMBI + Peru It is calculated on the basis of the difference in the yield that, on average, the sovereign securities of our country obtain with respect to the yield of the United States Treasury bond.

In this way, political risk and the possibility that a nation runs the risk of defaulting on certain obligations in payment to its international creditors can be anticipated.