Peru Central Bank Buys Most Dollars Since August on Tax Flows

Peru’s central bank made its biggest purchase of dollars in the spot market in six weeks to slow appreciation in the sol as companies bought local currency to pay taxes.

The monetary authority purchased $130 million and said on its website it paid an average 2.5836 per U.S. dollar. That is the biggest amount since Aug. 29, when it bought $158 million. Companies are purchasing soles to pay local income taxes before a deadline for monthly payments.

The sol appreciated 0.2 percent to 2.5820 per U.S. dollar at the close of trading, according to Deutsche Bank AG’s local unit. That is the currency’s strongest close since 1996, data from Peru’s financial regulator show.

“The supply of dollars is stronger than normal because of the tax payments so we’re expecting bigger interventions by the central bank,” said Mario Guerrero, an economist at Scotiabank Peru in Lima.

The yield on the nation’s benchmark 6.55 percent dollar- denominated bond due in March 2037 climbed two basis points, or 0.02 percentage point, to 3.54 percent, according to prices compiled by Bloomberg. The price fell 0.46 cent to 149 cents per dollar.

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

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.