Peru Dollar Bonds Rise Most in Seven Weeks on U.S. Economic Data

Peruvian dollar-denominated bonds rose the most in seven weeks as speculation borrowing costs will remain low in the U.S. to bolster growth spurred demand for higher-yielding, emerging-market assets.

The yield on the nation’s benchmark 6.55 percent dollar- denominated bond due March 2037 dropped four basis points, or 0.04 percentage point, to 4.48 percent at 3:07 p.m. in Lima. The bond’s price rose 0.74 cent to 130.91 cents per dollar.

U.S. reports today showed existing-home sales unexpectedly fell 2.6 percent, the Federal Reserve Bank of Philadelphia’s manufacturing index trailed estimates and jobless claims exceeded projections. China’s central bank pledged to ensure adequate availability of cash in the financial system by using tools including reductions in the reserve-requirement ratio, state media reported. The central bank of India (CBOI) April 17 cut borrowing costs for the first time since 2009.

“In an environment of slower global growth and lower rates as a consequence, emerging-market bonds will be in demand,” said Diego Donadio, a Latin America strategist at BNP Paribas in Sao Paulo.

The sol was unchanged at 2.6540 per U.S. dollar, according to Deutsche Bank AG’s local unit.

The country’s central bank bought $62 million in the spot market today to stem gains in the sol. It paid an average 2.6540 soles per U.S. dollar, according to a statement on the bank’s website.

Exports and foreign direct investment will help drive the sol to around 2.60 this year, though the central bank may use dollar purchases to prevent the sol from advancing beyond 2.65 in the short term, said Banco Bilbao Vizcaya Argentaria SA (BBVA) in an e-mailed note to clients.

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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