Peru Lures Back Investors as Political Shockwaves Dissipate
- Sol has rallied as tension eases between Castillo and congress
- Aggressive central bank rate hikes seen supporting demand
The central market in Lima, Peru.
Photographer: Angela Ponce/BloombergThis article is for subscribers only.
Investors who had been scared away from Peru by political turmoil are warming up to the South American country, betting the region’s fastest economic growth and higher interest rates will propel the sol’s rebound.
The Peruvian currency has risen 3.7% this month, bringing its rally from an all-time low on Sept. 30 to 7.2%, the world’s best performance over that period, paring the losses inflicted by concern that newly elected President Pedro Castillo would damage the business climate. Local stocks are also outstripping most global peers, rising 11% this year, along with domestic short-term bonds as the central bank moves to rein in inflationary risks by lifting benchmark interest rates.