Sol Advances to One-Month High as Peru Seeks Energy Investment

Peru’s sol rose to its strongest level in a month as the government’s plans to double investment in its offshore oil and natural gas industry stoked the outlook for overseas capital entering the country.

The sol gained 0.2 percent to 2.5830 per U.S. dollar at the close of trading in Lima, according to prices from Datatec. The central bank said on its website today it bought $120 million dollars for 2.5859 soles each in the spot market.

Peru, which has lined up $20 billion in energy projects through 2018 in a bid to double oil and gas output, plans to auction rights to develop 36 new oil and gas blocks, Luis Ortigas, the president of state oil contracting agency Perupetro, said today in Lima. The announcement reflects “continued positive sentiment” toward foreign direct investment in Peru, said Bret Rosen, a Latin America strategist at Standard Chartered Bank in New York.

“It is beneficial, not super huge, but part of the overall FDI story which is important to the sol,” Rosen said today in an e-mailed response to questions. “They want long-term capital in the country.”

The yield on the nation’s benchmark 7.84 percent sol bond due August 2020 fell one basis point, or 0.01 percentage point, to 3.79 percent at 4:21 p.m. in New York, according to data compiled by Bloomberg. The extra yield investors demand to own Peruvian government bonds instead of U.S. Treasuries fell five basis points to 144 basis points, according to JPMorgan Chase & Co.

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