Bloomberg News

Peruvian Sol Holds Near 15-Year High Amid Increased Inflows

July 19, 2012

Peru’s sol held near a 15-year high amid rising dollar inflows as foreign investors purchased local bonds and companies bought the currency to pay worker bonuses this month.

The sol earlier gained 0.1 percent before closing little changed at 2.6207 per U.S. dollar, according to Bloomberg prices. Data from Peru’s financial regulator shows it closed at 2.6190 on July 17 and 18, its strongest level since 1997.

The central bank bought $164 million in the spot market today to slow the sol’s advance, extending its purchases this month to $745 million.

“We normally see gains in the sol in July as companies pay” salary bonuses, said Gonzalo Navarro, the head trader at Banco Santander in Lima. “We’ve seen it happen all this week. Positive markets and inflows drive gains and then the central bank comes in and the sol closes flat.”

The yield on the nation’s 7.84 percent sol-denominated bond due in August 2020 fell one basis point, or 0.01 percentage point, to 4.63 percent today, according to prices compiled by Bloomberg. The price rose 0.09 centimo to 121.26 centimos per sol.

The Finance Ministry today sold bonds due September 2023 and February 2042 in its second local debt issuance this year.

To contact the reporter on this story: Andrea Jaramillo in Bogota at ajaramillo1@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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