Evolution of spreads on foreign loans to firms: the Peruvian case: 1992–1997

This study examines the evolution of spreads on external loans to Peruvian businesses and their impact on the economy between 1992 and 1997. Against the backdrop of Peru’s reintegration into international financial markets, the study seeks to determine whether perceptions of country risk have diminished and how this has affected external financing conditions, particularly spreads. The methodology includes a descriptive and quantitative analysis of loans recorded by the Central Bank, taking into account variables such as interest rates and repayment terms. The results reveal a clear downward trend in the average spread, which fell from 6.92% in 1992 to 1.21% in 1997, reflecting an improvement in country risk. In addition, a shift in the structure of loans is observed, with a significant move from the prime rate to LIBOR, which enhances the competitiveness of businesses. The implications of this trend suggest the need for policies that continue to promote economic stability and financial integration in order to maintain access to financing at competitive costs. (Abstract and audio: Department of Economic Publications)