Peru’s sol sank to a 10-month low after President Ollanta Humala said the government may purchase shares in Repsol SA (REP)’s local unit, fueling concern he plans to increase state control of the economy.
The sol dropped 0.5 percent to 2.6500 per U.S. dollar at 11:54 a.m. in Lima, the weakest level on a closing basis since July 2, according to prices from Datatec. The sol tumbled 1.7 percent last week in the biggest five-day decline since October 2009 as commodities plunged on concern expansion of the world’s largest economies is slowing.
The currency dropped today after Humala said in a TV interview that Peru is considering buying a minority stake in the refinery that was sold to Repsol during government asset sales in the 1990s.
“Peru has been lauded for growing without any government intervention,” Pedro Tuesta, a Washington-based Latin America economist at 4Cast Inc., said in a phone interview.
Finance Minister Miguel Castilla told the state news agency Andina that he hadn’t resigned after the Lima-based Expreso newspaper said he may have quit in protest over the government’s plan to purchase Repsol’s assets.
The yield on the nation’s benchmark sol bond maturing in August 2020 was little changed at 3.74 percent, according to data compiled by Bloomberg. The price declined 0.1 centimo to 125.80 centimos per sol.
To contact the reporter on this story: John Quigley in Lima at firstname.lastname@example.org
To contact the editor responsible for this story: David Papadopoulos at email@example.com