Peru Bonds Rise as Fed Stimulus Boosts Emerging-Market Assets
Peru’s bonds advanced after the Federal Reserve expanded stimulus measures to shore up the world’s largest economy, spurring demand for higher-yielding, emerging-market assets.
The yield on the nation’s benchmark 7.84 percent sol- denominated bond due in August 2020 fell three basis points, or 0.03 percentage point, to 4.39 percent at 10:57 a.m. in Lima, according to prices compiled by Bloomberg. The yield extended its weekly drop to seven basis points, the most since Aug. 24. The price increased 0.19 centimo to 122.68 centimos per sol today.
“A new round of quantitative easing increases demand for riskier assets and opens the door to stronger appreciation in the sol,” said Roberto Flores, the head of research at Inteligo SAB. “With that, the appetite for local currency bonds has grown.”
The sol was little changed at 2.5965 per U.S. dollar, according to Deutsche Bank AG’s local unit. The currency earlier touched 2.5960, the strongest level since 1997, data from Peru’s financial regulator show.
The Fed announced a third round of asset purchases known as quantitative easing yesterday, pledging for the first time that it will buy bonds until the economy recovers and keep the benchmark interest rate near zero until at least mid-2015.
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