Peruvian Sol Touches 10-Month Low as Humala Weighs Repsol StakeJohn Quigley
Peru’s sol touched the lowest level in 10 months after President Ollanta Humala said the government may buy shares in Repsol SA’s local unit, fueling concern he plans to increase state control of the economy.
The sol fell as much as 0.7 percent to 2.6560 per U.S. dollar, the lowest intraday level since June 28, according to prices from Datatec. It closed little changed at 2.6370.
The currency weakened today after Humala said in a TV interview that Peru is considering buying a minority stake in Refineria La Pampilla SA, operator of a refinery that was bought by Repsol during government asset sales in the 1990s.
“Foreigners are not happy about all this” and may be cutting back their sol holdings, Pedro Tuesta, a Washington-based Latin America economist at 4Cast Inc., said in a phone interview. “It’s a show of no confidence. Peru has been lauded for growing without any government intervention.”
Finance Minister Miguel Castilla told the state news agency Andina that he hadn’t resigned after the Lima-based Expreso newspaper said he may have quit in protest over the government’s plan to purchase Repsol’s assets. Randa Mussallam, a spokeswoman at the president’s office, didn’t return a phone call and an e-mailed message seeking comment.
The yield on Peru’s benchmark sol bond maturing in August 2020 was little changed at 3.74 percent, according to data compiled by Bloomberg. The price declined 0.01 centimo to 125.80 centimos per sol.