Bloomberg News

Peru Sol Gains on Speculation Central Banks May Take More Steps

August 06, 2012

Peru’s sol rose for a second straight day on speculation European and U.S. central banks may take additional steps to boost economic growth, supporting demand for emerging-market assets.

The sol appreciated 0.1 percent to 2.6180 per U.S. dollar at today’s close, according to Deutsche Bank AG’s local unit. That level is the strongest since 1996, data from Peru’s financial regulator indicate.

“As investors perceive liquidity will continue to flow from developed countries, they look for higher returns in countries such as Peru that are seen as attractive with relatively low risk,” Juan Carlos Odar, an economist at Banco de Credito del Peru in Lima, said in a phone interview.

Global stocks rallied as German Chancellor Angel Merkel’s government backed the European Central Bank’s bond-buying plan to help bring down borrowing costs in Spain and Italy. The Federal Reserve said Aug. 1 that it “will provide additional accommodation as needed” to bolster the economic expansion.

The yield on Peru’s 6.95 percent sol-denominated bond due in August 2031 rose one basis point, or 0.01 percentage point, to 5.25 percent, according to data compiled by Bloomberg. The price fell 0.18 centimo to 120.21 centimos per sol.

Peru’s central bank said on its website that it didn’t buy dollars in the spot market today. The last time it intervened in the market was July 19, when it purchased $164 million to slow the sol’s advance.

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

To contact the editor responsible for this story: Brendan Walsh at Bwalsh8@bloomberg.net


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