Peru’s Sol Advances Most in Two Weeks on Exporter Tax Payments

Peru’s sol climbed the most in two weeks as metal exporters paid local taxes, leading the central bank to buy dollars to stem gains in the local currency.

The sol strengthened 0.1 percent to 2.6925 per dollar at today’s close, from 2.6940 on Jan. 13, according to Deutsche Bank AG’s local unit. That’s the sol’s strongest advance since Jan. 3.

The sale of dollars by mining companies making monthly profit tax payments led the central bank to buy $488 million in the spot currency market last week to slow gains in the sol. The bank bought dollars today as the companies continued to sell the greenback, said Antonio Diaz, a Lima-based trader at Banco Internacional del Peru.

“There’s been a good flow of dollar sales by the mining firms, which has boosted local banks’ dollar holdings despite the big purchases by the central bank last week,” Diaz said.

The central bank bought $2 million today and paid an average 2.6920 soles per dollar, it said on its website.

Metals led by copper and gold account for two-thirds of the Andean country’s sales overseas. The country’s total exports rose 23 percent last year, according to the trade ministry.

The yield on the nation’s benchmark 7.84 percent sol- denominated bond due August 2020 rose one basis point, or 0.01 percentage point, to 5.76 percent, according to prices compiled by Bloomberg. The bond’s price fell 0.1 centimo to 113.87 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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