Peru’s Borrowing Costs Fall to Three-Month Low on Greek Accord
February 09, 2012, 4:47 PM ESTBy John Quigley
Feb. 9 (Bloomberg) -- Peru’s benchmark borrowing costs in dollars fell to a three-month low after Greece finalized a deal on austerity measures it needs to secure financial aid, easing concern that Europe’s debt crisis will worsen.
The extra yield investors demand to own Peruvian government bonds instead of U.S. Treasuries fell five basis points, or 0.05 percentage point, to 196 at 4:10 p.m. in Lima, according to JPMorgan Chase & Co.’s EMBI Global index. That’s the lowest since Nov. 8.
The Greek government agreed with the European Commission, European Central Bank and International Monetary Fund on austerity measures, Prime Minister Lucas Papademos said today. The accord clears the way for a deal to cut the nation’s debt and win its second rescue in two years.
A financial “meltdown” in Europe that consumes Italy and Spain “is less of a possibility right now,” said Pedro Tuesta, a Washington-based Latin America economist at 4Cast Inc. “It’s not going to be pretty, but it’s not going to be as ugly as people were thinking either.”
The yield on the nation’s benchmark 7.84 percent sol- denominated bond due August 2020 fell two basis points, or 0.02 percentage point, to 5.63 percent, according to prices compiled by Bloomberg. The security’s price rose 0.17 centimo to 114.78 centimos per sol.
The sol advanced 0.1 percent to 2.6865 per U.S. dollar, from 2.6880 yesterday, according to Deutsche Bank AG’s local unit. That’s the currency’s strongest since at least December 2008.
Peru’s central bank bought $30 million in the spot market to stem gains in the sol. It paid an average 2.6850 soles per dollar, the bank said on its website.
--Editors: Glenn Kalinoski, Brendan Walsh
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
