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Peruvian Yields Fall as Economic Outlook Boosts Demand for Soles

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Nov. 8 (Bloomberg) -- Peru’s sol bonds rose, pushing down yields the most in more than a week, as bets the economy will withstand a global slowdown boosted demand for the country’s financial assets.

The yield on the nation’s benchmark 7.84 percent sol-denominated bond due August 2020 fell three basis points, or 0.03 percentage point, to 5.69 percent at 11:29 a.m. Lima time, according to prices compiled by Bloomberg. The security’s price rose 0.21 centimo to 114.65 centimos per sol.

“There are always investors that will buy in the shorter part of the curve to bet on gains in the currency,” said Manuel Aldave, head of investments at Banco Internacional del Peru in Lima.

The sol rose to its strongest level since April 2008 yesterday after the central bank published a survey showing business sentiment improved for a second straight month in October. The central bank bought $2 million in the spot market to slow gains in the currency.

Peru will probably post “robust growth” of 6.5 percent this year as business confidence continues to recover from a drop during the country’s presidential elections, Carola Sandy, an economist at Credit Suisse AG, said today in a note to investors.

The sol was unchanged at 2.7020 per U.S. 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

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