SAO PAULO (Reuters) – A measure of country risk was on course to close at the highest level in two years on Tuesday, after registering the highest since March, leveraged by global risk aversion.
The cost of default protection against Brazilian sovereign debt measured by the five-year Credit Default Swaps (CDS) was this Tuesday at 270.18 basis points – a level that, maintained until closing, would be the highest since June 11, 2020, when the world was still dealing with the shocks of the pandemic in full swing.
In the last 12 sessions (including this one), the CDS rose in 11, accumulating a high of 49.75 basis points. On Monday, the premium jumped 14.87 basis points, the biggest daily increase since March 21 (15.97 basis points).
At current levels, this measure of Brazil risk is in line with the spreads of Colombia and South Africa, but well above those attributed to Mexico (around 164.6 basis points) and Chile (110 basis points).
In June, the Brazilian CDS rose almost 48 basis points, which would be the highest monthly increase since March 2020 (130.19 basis points), when the Covid-19 pandemic was declared.
(By Jose de Castro)
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