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Peru’s Sol Gains as Companies Sell Dollars to Pay Income Taxes

Aug. 20 (Bloomberg) -- Peru’s sol held near a 15-year high as exporters bought the currency to pay local income tax before a monthly deadline.

The currency climbed almost 0.1 percent to 2.6115 per U.S. dollar at the close of trading, from 2.6130 on Aug. 17, according to Deutsche Bank AG’s local unit. It has gained 3.2 percent this year.

“The flow of dollars for the payment of taxes should start to dry up now,” said Antonio Diaz, a trader at Banco Internacional del Peru. The currency will likely trade between 2.61 and 2.615 this week, with the central bank buying dollars in the spot market to prevent bigger swings, Diaz said.

The central bank last bought dollars Aug. 16 as the sol gained. It touched 2.611 the next day, the strongest level since 1997, data from Peru’s financial regulator show. The central bank didn’t purchase any dollars today.

The yield on the nation’s benchmark 7.84 percent sol-denominated bond due August 2020 was little changed at 4.62 percent, according to prices compiled by Bloomberg.

To contact the reporter on this story: John Quigley in Lima at jquigley8@bloomberg.net

To contact the editor responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net

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