Bloomberg News

Peru’s Sol Gains for First Time in Two Weeks on Central Bank

June 01, 2012

Peru’s sol gained for the first time in two weeks after the central bank stepped up dollar sales to meet demand for the U.S. currency spurred by Europe’s debt crisis.

The sol strengthened 0.1 percent to 2.7055 per U.S. dollar from 2.7075 yesterday, according to Deutsche Bank AG’s local unit. The currency weakened 0.3 percent this week.

The central bank sold $674 million this week, tapping into $57 billion in foreign currency reserves as the local currency erased its 2012 gains. It didn’t sell dollars today. The bank began selling dollars on May 25 for the first time since October.

There was “a big selloff by Peruvian standards so you have the central bank selling dollars to boost supply,” said Felipe Hernandez, an economist at RBS Securities Inc. in Stamford, Connecticut.

The yield on the nation’s benchmark 7.84 percent sol- denominated bond due August 2020 rose one basis point, or 0.01 percentage point, to 5.35 percent, according to data compiled by Bloomberg. The price fell 0.06 centimo to 116.29 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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