Peru Sol Leads Gains in Latin America Currencies on Swap Auction

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Peru’s sol led gains among Latin American currencies after a plunge to a six-year low spurred the biggest swap auction since the central bank started its intervention program in October.

The sol gained 0.3 percent to 3.172 per U.S. dollar at the close of trading in Lima, according to Datatec prices. The central bank sold $83 million in dollars and issued 1.14 billion soles ($359 million) of swaps, according to its website. It’s the first time it announced five auctions of 600 million soles each in one day.

“The dollar’s advance has been very fast over the last two weeks, so maybe the bank wanted to slow it down,” said Antonio Diaz, a trader at Banco Internacional del Peru, by phone from Lima.

Peru’s currency sank on Tuesday to its lowest level since March 2009 as the Federal Reserve moves closer to raising interest rates, boosting demand for U.S. currency. Peru’s intervention has helped limit declines in the sol since the Fed signaled an end to quantitative easing two years ago, making the currency the best performer in Latin America in that period.

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