Peruvian bonds rose, pushing down yields the most in three weeks, as the central bank’s efforts to curb swings in the sol boost the appeal of local-currency debt.
The yield on the nation’s benchmark 7.84 percent sol-denominated bond due August 2020 fell four basis points, or 0.04 percentage point, to 4.60 percent, according to prices compiled by Bloomberg. The price rose 0.24 centimo to 121.31 centimos per sol.
The central bank has purchased $785 million in the spot market this month to slow the sol’s advance. The currency touched a 15-year high yesterday as foreign direct investment, economic growth and a trade surplus boost inflows.
“The bonds are attractive because yields remain interesting” for carry-trade investors while the sol remains relatively stable, said Diego Llona, a trader at Banco Santander in Lima.
In the carry trade, investors buy higher-yielding assets with funds borrowed from countries with lower interest rates.
The sol weakened 0.1 percent to 2.6140 per U.S. dollar, from 2.6110 yesterday, according to Deutsche Bank AG’s local unit.