Country risk appears on the news almost every day, but rarely is it explained what it has to do with your wallet. Here we tell you what it is, how it's calculated, and how it can end up affecting your loans, prices, and the dollar.

Download the belo app and see how to manage your pesos and dollars with greater visibility, according to your account and current terms.

From a number on TV to your loan payment

On October 19, 2026, Argentina's country risk rose to 675 basis points, its highest level of the year, and the news reported it with urgency.

But they rarely explain what happens afterward with the rate you're charged on a personal loan or with the price of imported goods you buy at the supermarket.

Understanding what country risk is allows you to anticipate movements that will affect your finances before they show up on your credit card statement.

Country risk measures how much extra international investors demand from a country to lend it money, compared to what they would demand from the United States for the same term. It is expressed in basis points: each point equals 0.01%.

This number is published by JP Morgan through an index called the EMBI (Emerging Markets Bond Index).

To understand how country risk is calculated, it helps to think of it this way: the dollar bonds issued by a government are taken, their yield in the secondary market is measured, and the yield of a U.S. Treasury bond of comparable duration is subtracted.

With hypothetical numbers for illustration: if an Argentine bond yielded 11.25% annually and the equivalent U.S. bond yielded 4.5%, the difference would be 675 basis points, the level the indicator reached in October 2026.

That premium reflects the market's perception of the likelihood that the country will not be able to pay its debt, and it changes every day based on the supply and demand for those bonds.

How the number is constructed: a comparative example

How 100 country risk points can make your mortgage more expensive

When country risk rises, the government needs to offer higher rates to secure financing.

Those higher rates tend to spill over into the local financial system, because banks usually use sovereign bond yields as a benchmark to set their own interest rates.

Imagine, in a simplified way, a dollar-denominated loan whose rate tracks the country's cost of financing. With a country risk of 675 points and a Treasury bond at 4.5%, the base rate is around 11.25%. If the indicator rises to 775 points, that base rate goes to 12.25%.

On a 20-year, $50,000 loan, that additional percentage point represents about $35 more per month on the payment (from about $525 to about $559), which adds up to more than $8,000 extra over the life of the loan.

The impact on the exchange rate follows a similar logic. When investors perceive higher risk, they tend to sell Argentine assets and dollarize their portfolios.

That demand for dollars can put pressure on the exchange rate, making everything imported more expensive, from a TV to locally manufactured products priced in dollars.

Spikes in the dollar to Argentine peso exchange rate often coincide with increases in country risk, although not always nor with the same intensity, while periods of low country risk are associated with greater stability.

Chain effects of a rise in country risk

• Banks raise their rates for mortgages, personal loans, and consumer loans because the cost of financing rises across the entire economy.

• Investors may sell local assets and buy dollars, creating currency pressure and potentially depreciating the local currency.

• Imported products, and those priced in dollars even if produced locally, may see their prices increase for the end consumer.

• Those who finance purchases with credit cards or loans pay a higher rate just when prices have already gone up, compounding a double hit to their budget.

What it means when country risk drops and what you can do with that information

When the indicator drops, the chain works in reverse. The government gets cheaper financing, banks can lower their benchmark rates, the exchange rate tends to stabilize, and prices of imported goods stop feeling upward pressure.

The most useful thing isn't predicting where the indicator will go, but knowing what to do in any scenario.

If country risk is high, comparing interest rates across different loan products becomes more important because the spread between one bank and another can widen.

For those who transact in foreign currency—whether because they receive payments from abroad, pay for foreign currency subscriptions or travel—visibility over the exchange rate at the moment of payment makes a tangible difference in their budget.

That's where tools like belo come in handy: at belo, we designed a solution so you can see the exchange rate before confirming a transaction in another currency, not weeks later.

Knowing exactly how much you're paying at the moment of the transaction helps keep you in control.

Those who manage dollars as freelancers in Argentina find this visibility especially useful, given that their income and daily expenses aren't always denominated in the same currency.

Three practical moves for any EMBI scenario

• Periodically review the rates on financial products you already have, because a shift in the indicator can make your current loan more expensive than an available alternative.

• Diversify the currency in which you hold your savings, combining pesos and dollars according to your spending horizon.

• If you have foreign currency income or expenses, use tools to pay in dollars that show you the real cost before confirming, not after.

Country risk is a thermometer you can't control, but you can decide how to prepare for the weather it forecasts. Download the belo app and check the current terms according to your account.

Frequently asked questions about country risk and how it affects your wallet

Does country risk only affect investors, or does it also affect those who don't invest in the stock market?

It affects anyone who has a loan, buys imported goods, or uses foreign currency, regardless of whether they invest in financial assets. Personal loan rates and the prices of dollar-linked goods respond to the same context that moves the markets.

Does low country risk guarantee that interest rates will go down?

It does not guarantee an automatic drop, as banks factor in other variables such as local inflation and their own credit risk. However, a sustained decline in the EMBI does create the conditions for benchmark rates to gradually decrease.

Does it make sense to track country risk if I'm traveling abroad?

It does make sense because spikes in the indicator often coincide with exchange rate volatility, which changes how much your pesos are worth in dollars right when you need to exchange them. Monitoring the indicator before a trip gives you context to decide when and how to convert your money, especially if you have flexibility with your foreign currency purchase dates.