Peru’s sol fell the most in three weeks as the South American country’s central bank boosted its dollar purchases to help slow the currency’s appreciation.
The sol weakened 0.2 percent to 2.5870 per U.S. dollar at the close of trading in Lima, the biggest drop since March 6, according to prices from Datatec. The central bank bought $120 million for 2.5854 soles per dollar today, according to a statement on its website.
The monetary authority this week has increased the amount of its daily dollar purchases to almost triple the average $47 million per day recorded this month, according to central bank data. The bank, which also bought $120 million in the foreign- exchange market yesterday, is purchasing greenbacks to help limit the currency’s volatility after inflows surged in 2012, said RBS Securities Inc. analyst Felipe Hernandez.
“It’s a relatively high amount,” Hernandez said today in a telephone interview from Stamford, Connecticut. The central bank’s “goal is not necessarily to avoid the currency appreciating, but rather just to slow down the pace and speed with which the currency is appreciating to give time” to the rest of the economy to adjust.
The yield on Peru’s benchmark 7.84 percent sol bond due August 2020 rose one basis point, or 0.01 percentage point, to 3.80 percent at 3:35 p.m. in Lima, according to data compiled by Bloomberg. The extra yield investors demand to own Peruvian government bonds instead of U.S. Treasuries increased two basis points to 149 basis points, according to JPMorgan Chase & Co.
To contact the reporter on this story: Nathan Gill in Quito at email@example.com
To contact the editor responsible for this story: David Papadopoulos at firstname.lastname@example.org