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Peru’s Sol Falls as Global Growth Concern Curbs Risk Appetite

Oct. 23 (Bloomberg) -- Peru’s sol declined the most in a week on concern slowing global growth will curb demand for the Latin American country’s exports.

The sol depreciated 0.1 percent to 2.5820 per U.S. dollar at today’s close, from 2.5790 yesterday.

U.S. companies reported financial results that missed analyst estimates, adding to evidence the recovery in the world’s largest economy is faltering. Demand for Peru’s bonds prevented a bigger slide in the sol, said Dirk Willer, the head of Latin American local markets strategy at Citigroup Inc. in New York.

The sol “has the best fundamentals in the region, therefore it outperforms, but if all hell breaks loose in the region, it should weaken somewhat, which is what it’s doing,” Willer said.

Peru’s central bank bought $80 million in the spot market and said on its website it paid an average 2.5819 soles per dollar.

The yield on the nation’s benchmark 7.84 percent sol-denominated bond due August 2020 declined two basis points, or 0.02 percentage point, to 4.25 percent, according to prices compiled by Bloomberg. The price rose 0.11 centimo to 123.45 centimos per sol.

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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