Peru Sol Rises First Time in Four Days on China Spending PledgeJohn Quigley
Peru’s sol rose for the first time in four days as China’s pledge to increase government spending spurred demand for emerging-market assets.
The sol gained 0.1 percent to 2.5945 per U.S. dollar in Lima, according to prices compiled by Bloomberg. The currency has dropped 1.7 percent this year after gaining 5.7 percent in 2012.
Emerging-market stocks and currencies rallied today after China’s Finance Ministry said it will boost spending by 10 percent this year as Premier Wen Jiabao set an economic growth target of 7.5 percent, unchanged from 2012.
“International markets are more optimistic today,” said Juan Carlos Odar, a senior analyst at Banco de Credito del Peru in Lima.
The sol has had its worst start to a year since 2009 after the central bank bought $3.4 billion of U.S. currency and raised lenders’ dollar reserve requirements three times to counter increased capital inflows.
The central bank said on its website it purchased $10 million today, ending a week-long absence from the foreign exchange market that was its longest since August.
The yield on the nation’s 7.125 percent dollar bond due March 2019 fell two basis points, or 0.02 percentage point, to 2.08 percent, according to prices compiled by Bloomberg. The price rose 0.12 cent to 128.62 cents on the dollar.