Bloomberg News

Peru Sol Climbs to Three-Week High on Taxes, Worker Bonuses

July 09, 2012

Peru’s sol climbed to a three-week high after companies bought the currency to pay local taxes and worker bonuses.

The sol advanced 0.4 percent to 2.6385 per U.S. dollar today, according to Deutsche Bank AG’s local unit. That’s the currency’s strongest closing level since June 19.

“It’s the delayed effect of increased dollar sales by companies last week for the payment of taxes and bonuses,” said Antonio Diaz, a trader at Banco Internacional del Peru in Lima. The dollar supply boosted local banks’ dollar holdings while demand from foreign investors has died down, he said.

Local commercial banks’ net dollar positions totaled $441 million on July 5, compared with $318 million a day earlier, according to central bank data compiled by Bloomberg.

The central bank didn’t buy or sell dollars in the spot market today.

The yield on the nation’s benchmark 7.84 percent sol- denominated bond due August 2020 rose four basis points, or 0.04 percentage point, to 4.95 percent, according to prices compiled by Bloomberg. The bond’s price fell 0.28 centimo to 118.99 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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