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Saturday, March 23, 2013

Peru Sol Holds Within 0.1% of Three-Week High on Tax Payments

Peru’s sol held within 0.1 percent of a three-week high as local companies sold greenbacks to pay taxes, offsetting the central bank’s dollar purchases to stem appreciation.


The sol ended the session little changed at 2.5920 per U.S. dollar after closing yesterday at the strongest level since Feb. 28, according to prices from Datatec. The currency has weakened 1.5 percent this year after rising 5.7 percent in 2012.

Today is the deadline for Peruvian companies to make monthly tax payments and they have until April 2 to meet their obligations for 2012.

The monetary authority bought $20 million in the foreign-exchange market today and has purchased $520 million since March 12, compared with $20 million in the previous eight-day period.

“The market is getting the message that they want the sol to be near 2.60” in the short term, Pedro Tuesta, a Latin America economist at 4Cast Inc., said by phone from Washington.

“There is not much being traded. They see the central bank coming in all the time, even when the sol is depreciating.”

Policy makers plan to ease restrictions on pension funds’ foreign investments for a third time this year, central bank President Julio Velarde said yesterday.

Policy makers on Feb. 15 increased the limit on the funds’ foreign portfolio to 34 percent from 32 percent as part of measures designed to curb the sol’s rally.

The yield on Peru’s benchmark 7.84 percent sol bond due in August 2020 declined one basis point, or 0.01 percentage point, to 3.79 percent, according to data compiled by Bloomberg.

The price climbed 0.06 centimo to 125.71 centimos per sol.

bloomberg.com

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