Bloomberg News

Peru’s Sol Holds Near 15-Year High on Income Tax Payments

March 12, 2012

Peru’s sol held near a 15-year high after companies bought the currency to pay local income taxes before a deadline next month.

The sol was unchanged at 2.6695 per dollar at today’s close, according to Deutsche Bank AG’s local unit. It earlier touched 2.6670, the strongest level since 1997, data from Peru’s financial regulator show.

“We’re expecting more sol buying for the payment of taxes,” said Antonio Diaz, a trader at Banco Internacional del Peru in Lima. “Flows haven’t been that big today but possibly tomorrow or in the coming days and weeks” demand will grow, he said.

The central bank has bought $4.6 billion in the spot market this year, including $121 million today, to stem gains in the sol as companies with dollar-denominated revenue bought the currency to pay taxes.

Peru’s trade surplus widened in January on rising exports of copper, gold and fishmeal, the national statistics agency said today. The country posted a trade surplus of $739 million, compared with $350 million a year ago, as exports climbed 32 percent to $3.93 billion.

Imports rose 22 percent to $3.19 billion, which reflects the strength of the local currency, Celfin Capital said in an e- mailed report.

The yield on the nation’s benchmark 7.84 percent sol- denominated bond due August 2020 fell four basis points, or 0.04 percentage point, to 5.40 percent, according to prices compiled by Bloomberg. The security’s price rose 0.26 centimo to 116.30 centimos per sol.

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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