Peru Bonds Gain as China Outlook Spurs Risk Bid; Sol Unchanged

Peruvian bonds rose, pushing yields to a record low, as China’s export growth buoyed global economic prospects and spurred demand for higher-yielding, emerging-market assets.

The yield on the nation’s benchmark 7.84 percent sol-denominated bond due in August 2020 fell three basis points, or 0.03 percentage point, to 3.82 percent at 2:29 p.m. in Lima, according to data compiled by Bloomberg. The price increased 0.18 centimo to 126.08 centimos per sol.

“Emerging assets, bonds and currencies, are performing very well,” Diego Donadio, a Latin America strategist at BNP Paribas Brasil SA in Sao Paulo. “If you buy Peruvian sol bonds, you gain on the yield and the possible appreciation of the currency. The outlook for the currency is comfortable.”

Stocks rallied after China’s exports climbed last month the most since May. Weaker demand in Europe and U.S. damped China’s exports last year, hurting growth in the world’s second-largest economy and Peru’s top trading partner.

The sol was unchanged at 2.5505 per U.S. dollar at today’s close, according to data compiled by Bloomberg. The currency touched 2.5411 per U.S. dollar on Jan. 7, the strongest since October 1996, data from Peru’s banking regulator show.

Peru’s central bank bought $60 million in the spot currency market today and said on its website it paid an average 2.5505 soles per U.S. dollar.

Policy makers convening today will keep borrowing costs unchanged at 4.25 percent for a 20th consecutive month, according to 14 analysts in a Bloomberg survey. The bank is due to announce its decision at 6 p.m. in Lima.

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