Bloomberg News

Peru Sol Falls for First Time in Week as Bank Purchases Dollars

January 07, 2013

Peru’s sol depreciated for the first time in a week as the central bank bought dollars to tame a rally in the local currency.

The sol weakened 0.1 percent to 2.5460 per U.S. dollar at today’s close, according to prices compiled by Bloomberg. That was its first decline since Dec. 28. The currency earlier touched 2.5411, the strongest level since October 1996, data from Peru’s financial regulator show.

The Andean nation’s central bank has stepped up dollar purchases to ease gains in the sol as companies acquire local currency to pay taxes before an annual deadline. The central bank said on its website it bought $80 million in the spot market today after buying $100 million on Jan. 4, the most in 11 weeks.

The central bank’s dollar purchases “offset the excess” generated by companies’ selling, said Gonzalo Navarro, the head trader at Banco Santander SA’s local unit.

The yield on the nation’s benchmark 7.84 percent sol- denominated bond due in August 2020 fell five basis points, or 0.05 percentage point, to 3.84 percent, according to data compiled by Bloomberg. The price climbed 0.32 centimo to 125.95 centimos per sol at 2:57 p.m. in Lima.

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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