Peru’s dollar-denominated bond yields posted their biggest weekly increase since September as European fiscal and political turmoil discouraged demand for emerging- market assets.
Yields on the nation’s benchmark 6.55 percent dollar bonds due in March 2037 rose four basis points, or 0.04 percentage point, to 4.50 percent at 3:10 p.m. in Lima. They extended their weekly increase to 15 basis points, the steepest since the five days ended Sept. 23. The bond’s price has fallen 2.76 cents from a week ago to 130.49 cents per dollar.
“You have a risk crisis with some levels of contagion with other countries in the south of Europe,” said Alejandro Grisanti, an analyst at Barclays Plc in New York. Investors are selling assets “to seek refuge in U.S. Treasuries,” he said.
The sol weakened 0.6 percent to 2.67 per U.S. dollar this week and declined 0.1 percent in trading today, according to Deutsche Bank AG’s local unit.
German Finance Minister Wolfgang Schaeuble said financial turmoil may last another two years, adding to concern Europe’s crisis is worsening. Greece’s credit rating was cut one level to CCC from B- by Fitch Ratings yesterday on concern the politically deadlocked country may not be able to sustain its euro membership.
Moody’s Investors Service lowered the debt ratings of 16 Spanish banks yesterday, citing mounting loan losses and a national recession.
Peru’s central bank sold dollar repurchase agreements for the first time ever yesterday to ease a shortage of greenbacks amid demand for a refuge in the U.S. currency and after a May 1 increase in reserve requirements.
The bank sold $50 million of one-day agreements yielding 5.5 percent yesterday. Today it sold $200 million of agreements maturing in seven-days at 4.8 percent, and $200 million maturing in three days at 6.45 percent, the bank said on its website.
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