Bloomberg News

Peru Sol Holds at One-Week High on Tax Payments; Bonds Unchanged

April 04, 2013

Peru’s sol held at a one-week high on speculation that demand for the currency will increase as companies pay taxes and as banks reduced dollar holdings.

The sol closed unchanged at 2.5840 per U.S. dollar at today’s close, according to prices from Datatec. It has appreciated 0.9 percent since touching a 16-week low on March 6.

The period for monthly income tax payments starts April 9, according to the website of Peru’s tax agency known as Sunat. Banks’ net dollar holdings declined to $347 million yesterday from $367 million the previous day, central bank data compiled by Bloomberg show.

Companies exchanging dollars will probably increase the supply of soles while the central bank “may relax its intervention a little as it has been doing in recent days,” said Gonzalo Navarro, the head trader at Banco Santander SA’s local unit.

The central bank has purchased $80 million of U.S. currency this week, including $20 million today, after buying $300 million last week, according to its website.

The yield on Peru’s benchmark 7.84 percent sol bond due August 2020 was little changed at 3.77 percent at 2:35 p.m. in Lima, according to data compiled by Bloomberg. The price rose 0.02 centimo to 125.76 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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