Peruvian Sol Strengthens First Time in Five Days on Intervention

Peru’s sol strengthened for the first time in five days after the central bank intervened yesterday by selling dollar-indexed certificates.

The sol appreciated 0.4 percent to 2.7830 per U.S. dollar at today’s close, according to prices from Datatec. The advance pared the currency’s weekly decline to 2.2 percent.

“The central bank provided liquidity, which calmed the market, and that’s what we’re seeing today,” said Antonio Diaz, a trader at Banco Internacional del Peru SAA in Lima. “It sent a good signal to the market.”

Banco Central de Reserva del Peru sold 779 million soles ($280 million) in dollar-linked contracts yesterday, the highest daily amount this year. The sol plunged 1.5 percent yesterday to a two year low of 2.7930 after the U.S. Federal Reserve said it may start paring a stimulus program this year, triggering a selloff in emerging-market assets.

Peru’s central bank offered to sell 300 million soles of the certificates today but didn’t find any takers, according to its website.

The yield on Peru’s benchmark local-currency bonds due August 2020 increased nine basis points, or 0.09 percentage point, to 5.57 percent today, according to data compiled by Bloomberg. The price slid 0.58 centimo to 113.17 centimos per sol.

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