Buenos Aires - - Thursday 21 De January

Home Argentine Politics and Economics What is country risk?

What is country risk?

Go to the note and find a simple explanation for a complex topic.

Politics and Economics

There is an increasingly common topic of talk in  porteños cafes : country risk. But what exactly is the country risk?

Simply put, it is a simple algorithm (mathematical account) that compares the level of debt that a  country  has (with its consequent interest rate), with the rate of return more sure there is in the market, usually that of the United States Federal Reserve.

The result of this account expresses how much more feasible it would be to maximize investments by placing foreign exchange in emerging countries versus doing so within a fixed term of a powerful  economy  . That is, the risk of investment in a given country (hence the name).

Now it must sound logical that that number is so big. Then let's think together. Whether the current  government  's strategy was to return to international credit markets to finance the infrastructure works that were lagged behind, and in parallel with the EDF's strategy (which decided the rate of return of fixed deadlines in the US) was to increase after almost a decade that rate, it is logical that the country risk has grown unmeasurably.

So, do we have to worry? Many are alarmed because the government does not talk about this or does not show “concern.” However, that's what should be calm: it is logical that this was a possible forecast for an economic team that went into debt at 100 years knowing that the FED was analyzing the climb several months ago (it was on the cover of Times, to which I imagine they are subscribed. all the ministers of economy in the world). It was the most obvious result of macro strategy.

The good thing would be that other indicators such as the Central Bank reserve (government savings), foreign direct  investment  (foreign investment that come to invest in long-term projects) or the balance commercial (what we import versus what we export) accompany this number positively.

So, having said that, this country risk is demystified as a red alarm about Argentina. It's a number that the world looks at, of course, but that world knows what it means, and it's not going to rely on that only when it comes to investing, nor will the national team economists change the course of their strategy to reverse this number.

It should be known that the economy is a closed mayonnaise sachet, squeezed on one side and mayonnaise shifts from place, but never disappears.

Publication Date: 17/03/2020

Rate this item

Te sugerimos continuar leyendo las siguientes notas:

Bitcoin criptomonedas Are cryptocurrencies money?
Grafic Coronavirus and the economy



I wrote! Reader Notes

Go to section


By: Lucas 18 March, 2020

Pero si ni tú mamá invierte en este país! Como no alarmarnos? Petroleras y mineras se están yendo a otros países porque no tienen un retorno mayor al %30. No sean fanáticos bobos, salgan a manifestarse contra este gobierno se chorros y vagos!!

By: Lucas 18 March, 2020

En respuesta a

Donde estuviste los 4 años anteriores?

Leave feedback


Business and Enterprises
fabrica A factory that does not stop taking steps forward

We tell you the story of a Cordovan shoe factory that grows without stopping, and by leaps and bound...

iggy pop Iggy Pop and a story of heartbreak with a neuquina

Historic Iggy Pop dedicated a very sad lyrics to whom he knew how to be his girlfriend during the 90...

Argentines around the world
nahuel clandestino Meet Neuquino Nahue Clandestino and his experience around the globe as a recycling entrepreneur

The young man from Cutral Có tells us how it was like to travel the world working with recycling pro...

lizy tagliani Ushuaia witnessed Lizy Tagliani's engagement

Lizy Tagliani and Leo Alturria chose Ushuaia as the place to secure their partner with a somewhat pe...



I want to be up to date

Subscribe to our newsletter and I received the latest news