Aug. 16 (Bloomberg) -- Peru's Finance Minister Pedro-Pablo Kuczynski, a former managing director at Credit Suisse First Boston and an ex-World Bank official, was named the nation's new prime minister to head a cabinet that took office today.

Kuczynski, 66, replaced Carlos Ferrero, who resigned as prime minister last week. Kuczynski's deputy, Fernando Zavala, was appointed finance minister.

``We're trying to ensure we leave the next government with the situation in order,'' Kuczynski told Lima-based radio station Radioprogramas.

The nation's bonds and stocks gained. Kuczynski, who returned to the finance minister's post in 2004, two years after completing a previous stint in the job, has overseen the longest unbroken stretch of economic growth in Peru's history.

The yield on Peru's 9 7/8 bond due 2015 bond fell to 6.141 percent from 6.263 percent yesterday, according to JPMorgan Chase & Co. at 2:10 p.m. in New York. The bond's price, which moves inversely to its yield, rose 1 cent on the dollar to a record 126.50. The bond has gained 12.5 cents since April 15.

`Positive Stance'

``There are unlikely to be changes in the positive macro- economic stance that the government has pursued despite several cabinet changes,'' Sebastian Briozzo, a credit analyst at Standard & Poor's in New York, said in a telephone interview.

President Alejandro Toledo changed seven ministers in the second cabinet shuffle this year. Kuczynski is the government's fourth prime minister under Toledo and Zavala the fourth finance minister. Toledo retained Foreign Trade Minister Alfredo Ferrero and Energy & Mines Minister Glodomiro Sanchez.

During Kuczynski's tenure as finance minister, Peru reached an agreement with the Paris Club to prepay $1.55 billion of debt. The finance ministry estimates the economy will expand 6 percent this year after growing 5 percent in 2004. Annual inflation has dropped to 1.4 percent from 3.5 percent last year, and the budget deficit has narrowed to less than 1 percent of gross domestic product from 1.1 percent in 2004.

Last month, S&P's raised Peru's long-term BB foreign currency debt rating outlook to positive from stable on improved expectations for medium-term economic growth.

``The rating agencies wanted a degree of continuity, and Fernando Zavala will guarantee that,'' Kuczynski said.

Zavala, who has a master's in business from the University of Birmingham, England, and was a former manager at Peru's copyright protection agency Indecopi, had been deputy economy minister since February 2002.

Mandate

Toledo's five-year mandate expires July 28, 2006.

Toledo's approval rating fell to 8 percent from 16 percent last week, according to an Aug. 13 survey by polling company Apoyo Opinion & Mercado SA. About 51 percent of those polled blamed Toledo for the collapse of his cabinet by appointing political ally Fernando Olivera as foreign minister. About 90 percent said they opposed the appointment of Olivera, who was replaced today by deputy minister Oscar Maurtua.

The Peruvian currency the sol was little changed at 3.2524 to the dollar at 2:13 p.m. New York time. The sol has gained 4.6 percent against the dollar over the past 12 months.

Lima's Stock Exchange rose 33 points, or 0.7 percent, to a record 4,551.79 points at 2:14 p.m. New York time. The exchange has gained 23 percent since mid-May.

Investors demand 1.9 percentage points more yield to hold Peru's bond due 2015 instead of a U.S. Treasury note of comparable maturity, down from 3.2 percentage points in May, according to Bloomberg data.

To contact the reporter on this story: Alex Emery in Lima at aemery1@bloomberg.net

Last Updated: August 16, 2005 14:44 EDT