Peru Sol Rallies Most Since 2011 as Petroperu Backs Off Repsol

Peru’s sol surged the most since 2011 after the Andean nation ruled out a bid for the local assets of Repsol SA, allaying concern that the government plans to increase control of natural resources.

The sol jumped 0.8 percent to 2.6270 per U.S. dollar at today’s close, the most since June 2, 2011, according to prices from Datatec. Its 0.4 percent gain this week was the first since the five days ending April 5.

The currency rebounded from a 10-month low after Energy and Mines Minister Jorge Merino said yesterday Petroleos del Peru SA, the state oil company commonly known as Petroperu, won’t bid for a refinery, gas distributor and service stations that Repsol may put up for sale. The decision will bolster investor confidence, the Lima Chamber of Commerce said in an e-mailed statement. Copper, the country’s top export, rose the most in 18 months as U.S. hiring picked up more than expected.

The sol’s gain “reflects the mix of good political news along with a substantial rally in copper prices,” said David Spegel, the global head of emerging markets strategy at ING Financial Markets in New York.

The central bank said on its website it didn’t buy or sell dollars in the spot market.

Petroperu’s interest in Repsol’s assets raised the risk of nationalizations in other industries, like those carried out by the governments of Venezuela and Bolivia, Alfonso Garcia Miro, president of Peru’s business confederation Confiep, said April 28.

Investors will step up scrutiny of President Ollanta Humala’s policy decisions, Alonso Cervera and Di Fu, analysts at Credit Suisse AG, wrote in e-mailed report today.

The yield on Peru’s benchmark 7.84 percent sol bond due August 2020 fell three basis points, or 0.03 percentage point, to 3.87 percent, according to data compiled by Bloomberg. The price rose 0.17 centimo to 124.80 centimos per sol.

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