Peru will buy back as much as $1.5 billion of foreign debt next year as part of measures to slow the appreciation of its currency, the sol, Finance Minister Miguel Castilla said.
The government will tap its fiscal surplus to prepay “expensive” dollar debt, Castilla told reporters in Lima today.
Peru’s central bank and the banking regulator will take steps to ease pressure on the local currency, which is trading at a 16-year high, Castilla said. The central bank has bought $13.5 billion in the spot market, increased reserve requirements and proposed restrictions on local banks’ dollar sales this year to combat appreciation.
“Peru is very attractive and the capital entering the country is mainly long term.” Castilla said. “It’s important to mitigate the effects of this influx of capital.”
To contact the reporter on this story: John Quigley in Lima at firstname.lastname@example.org
To contact the editor responsible for this story: Paul Tighe at email@example.com