Peru Sells Record $600 Million After Sol Touched Three-Year LowJohn Quigley
Peru’s central bank sold a record $600 million in the local foreign-exchange market to support the sol after it touched a three-year low this week.
The central bank’s move today increased the amount of dollars sold since July 2 to $2.65 billion, according to its website. Peru’s currency has plunged 9.2 percent this year as metal exports dropped and slower economic growth curbed demand for the country’s financial assets.
The sol touched 2.84 per U.S. dollar on Aug. 19, its weakest intraday level since June 2010. It gained 0.1 percent to 2.8110 at today’s close, according to prices from Datatec.
“The central bank is probably looking to help with the rearranging of portfolios while trying to avoid any abrupt movements” in the sol, Hugo Perea, the chief economist at BBVA Banco Continental in Lima, said in a phone interview. “It has a lot of reserves. Interventions of this magnitude are not unsustainable though nor are they likely to be very common.”