Peruvian bonds rose, pushing down yields for the first time in almost a week, as speculation the Federal Reserve will maintain record-low interest rates boosted demand for higher-yielding, emerging-market assets.
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 5.48 percent at 4:03 p.m. Lima time, according to prices compiled by Bloomberg. The security’s price rose 0.13 centimo to 115.62 centimos per sol.
Accommodative monetary policy is still needed to reduce U.S. joblessness, Fed Chairman Ben S. Bernanke said yesterday. Peruvian yields rose March 14 after the Fed raised its outlook for the U.S. economy, fueling speculation it won’t begin a third round of quantitative easing and may raise interest rates.
Bernanke “is waiting to see evidence that demand is supporting the improvement in labor markets,” said Diego Donadio, a Latin America strategist at BNP Paribas Brasil in Sao Paulo. “It suggests more monetary stimulus could be seen in the U.S.”
The sol was little changed at 2.6690 per U.S. dollar, from 2.67 yesterday, according to Deutsche Bank AG’s local unit.
The central bank bought $42 million in the spot market today to curb gains in the sol. It paid an average 2.6693 soles per U.S. dollar, the bank said in a statement on its website.
The extra yield investors demand to own Peruvian government bonds instead of U.S. Treasuries rose six basis points to 163, according to JPMorgan Chase & Co.
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