Peru’s sol rebounded from a record low after Central Bank President Julio Velarde agreed to stay in the post for another five-year term, Bloomberg News reported. Velarde, 69, has been in the role since 2006, overseeing a long period of relatively strong growth and low inflation. After a series of conversations with new Finance Minister Pedro Francke about extending his tenure, the decision was made on Monday afternoon. The sol gained 1.6% to 4.05 per dollar at 9:10 a.m. in Lima, the biggest increase in emerging markets on Tuesday.
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Peru’s Finance Minister Pedro Francke was given assurances from the new government that he’ll be able to implement his economic program, he said in the first interview since securing his new role, Bloomberg News reported. Francke, a former World Bank economist, was sworn in late Friday, a day when markets crashed amid investor concern that he wouldn’t take the post due to differences with other members of the cabinet appointed by President Pedro Castillo. These included Guido Bellido, a lawmaker who considers the communist government of Cuba to be a democracy, as prime minister.
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Peruvian assets tumbled on concern new President Pedro Castillo’s top economic adviser may not take a cabinet role, further fueling investor anxiety over his government’s plans to remake the economy, Bloomberg News reported. An ETF tracking Peru stocks fell more than 7%, the currency had its worst day since 1994 and overseas bonds due in 2031 slipped to the lowest in seven weeks.
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Investors sent Peruvian bonds sliding in the aftermath of President Pedro Castillo’s inaugural call for a new constitution and choice of prime minister, Bloomberg News reported. Peru’s dollar bonds due in a century are the second-worst performers in the world on Thursday, beating only serial-defaulter Belize, according to data compiled by Bloomberg. Meanwhile, the yield on the benchmark bond due in 2031 rose to the highest since the close on June 16, a day after the final vote count showed Marxist party-backed Castillo winning the election.
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The paramount issue for Peru’s economy is a swift recovery from the mass destruction of jobs last year, while the widening fiscal deficit and recent inflation spike are both temporary, according to economists advising Pedro Castillo, the nation’s probable next president, Bloomberg News reported.
Peru’s currency and stocks tumbled after incomplete results of Sunday’s presidential runoff showed the leftist candidate gaining momentum even as he trailed by a thin margin in the count, Bloomberg News reported. The sol headed to its biggest drop in more than a decade at one point and the S&P/BVL Peru General Index fell as much as 6.8%, the most since November, with mining companies and financial firms among the hardest hit. Overseas bonds edged lower in light trading while the cost to insure against a default climbed.
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Peru’s closely watched presidential election race between two polarized candidates is the latest in a string of political risk events haunting investors in Latin America, a region struggling to keep up with its global peers despite a commodities boom, Reuters reported. Latin America was engulfed in social unrest before the COVID-19 pandemic hit. Now a string of elections that continues into 2022, protests in Colombia and upheaval over Chile's constitution have investors bracing for a new wave of uncertainty over policy making.
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Peru’s currency and bonds tumbled Monday after an opinion poll showed leftist presidential candidate Pedro Castillo as the clear favorite ahead of June’s presidential runoff, Bloomberg News reported. The Peruvian sol turned in the worst-performance in the developing world. Castillo, whose party has praised Fidel Castro and Venezuela’s Hugo Chavez, is leading Keiko Fujimori by 11 percentage points, according to the survey by Ipsos Peru carried out between April 15 and 16. Fujimori is the polarizing right-wing daughter of a jailed former president.
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Two developments in the China Fishery Chapter 11 bankruptcy filing have given William Brandt, the trustee overseeing the sale of the company’s Peruvian assets, hope that he will get a deal done, Seafood Source reported. On 19 February, Brandt filed a proposed settlement agreement with China Fishery Group’s court-appointed liquidator, FTI Consulting, which had sued the company, arguing it had used ill-gotten earnings to purchase Copeinca in 2013.
Latin American countries should quicken steps for airlines to renew domestic flights no later than July before more companies are forced to declare bankruptcy or close, a high-ranking official of the International Air Transport Association (IATA) said on Thursday, Reuters reported. The trade group estimated losses for airlines in Latin America at $4 billion this year, with total losses for the industry expected to reach $84 billion globally. Latin America has imposed stricter travel restrictions than most regions to fight coronavirus.