Peru’s sol weakened after the central bank introduced new securities designed to encourage investors to put dollars into instruments besides the currency and local debt.
Peruvian bonds rose amid speculation annual inflation slowed this month, buoying demand for the fixed-rate securities.
Peru kept borrowing costs unchanged amid expectations that reserve requirement cuts over the last year will help sustain the current expansion.
Peru’s economic growth unexpectedly quickened in November, led by construction, fueling expectations the central bank will keep its key interest rate on hold as inflation remains subdued.
Peru’s sol fell to its weakest level in eight weeks as speculation that any Federal Reserve program to boost the U.S. economy will be gradual curbed demand for emerging-market assets.
Peru’s sol rose the most in four months as Peruvian companies bought the currency to pay year-end bonuses and local income taxes.
Peru’s consumer prices rose more than economists forecast in June.
Peru’s sol posted its biggest two-day gain in almost eight months as speculation the Federal Reserve will take steps to bolster the U.S. economy spurred demand for higher-yielding, emerging-market assets.
Peru’s monthly inflation rate held close to its highest level in 33 months in April as food prices surged, increasing pressure on the central bank to increase its benchmark lending rate this month.
"Activity will start to rebound from August and with more certainty September."
- Roberto Flores on Aug 07, 2014