Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Castilla Says Peru Can Expand $4 Billion Purchase Plan

Feb. 18 (Bloomberg) -- Peru’s government is ready to expand a plan to purchase $4 billion of U.S. currency to support the central bank’s effort to slow appreciation of the sol, Finance Minister Miguel Castilla said.

The Finance Ministry will buy at least $1 billion to service foreign debt as part of the plan to offset increased dollar inflows, Castilla told reporters in Lima. It will also prepay $1.8 billion in multilateral debt and add $1.2 billion to contingency reserves.

Peru’s foreign-currency inflows have risen amid increased demand as investors from developed economies seek higher-yielding assets in emerging markets, and as Peruvian companies seek financing abroad. The central bank has boosted dollar purchases this year and raised reserve requirements to curb dollar supply. The Finance Ministry will coordinate its purchases with the central bank, which has limits to how many dollars it can buy in the currency market without stirring inflation, Castilla said.

While the sol remains near its fundamental value versus the dollar, the government seeks to avoid an “accelerated” appreciation, Castilla said. The strength of the sol is a “challenge” for the export sector, he said.

The sol weakened 0.1 percent to 2.5765 per U.S. dollar at today’s close, according to Bloomberg prices.

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

To contact the editor responsible for this story: Andre Soliani at asoliani@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.