Bloomberg News

Peru Buys Most Dollars in Month as Sol Rises to Three-Year High

January 12, 2012

Jan. 12 (Bloomberg) -- Peru’s central bank made its biggest dollar purchase in a month after the sol rose to a three-year high amid optimism Europe’s debt crisis isn’t worsening.

The central bank bought $244 million in the spot currency market today, the most since Dec. 1, to stem gains in the sol. The bank paid an average 2.6920 soles per dollar, it said on its website.

The currency rose less than 0.1 percent to 2.6920 per U.S. dollar at today’s close, from 2.6930 yesterday, according to Deutsche Bank AG’s local unit.

Peruvian commercial banks sold dollars as European Central Bank President Mario Draghi said he saw signs of stabilization in the region and yields fell at Spanish and Italian debt auctions. Local banks bought dollars last month amid concern Europe’s debt turmoil might derail the global economy.

“We’ve started the year with a better international environment, which probably led to a reduction in the high level of” local banks’ dollar holdings, said Mario Guerrero, an economist at Scotiabank Peru.

The yield on the nation’s benchmark 7.84 percent sol- denominated bond due August 2020 rose three basis points, or 0.03 percentage point, to 5.73 percent, according to prices compiled by Bloomberg. The bond’s price fell 0.19 centimo to 114.13 centimos per sol.

--Editors: Glenn J. Kalinoski, Marie-France Han

To contact the reporter on this story: John Quigley in Lima at jquigley8@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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