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Economy | July 13, 2011 [ 11:42 ]

Peruvian currency rises to highest level in three years

LivinginPeru.com

The value of the Peruvian sol has reached its highest level in three years, prompting Peru’s central bank to buy American currency.

As reported in Bloomberg News, the central bank purchased $79 million in the last seven weeks, in the spot currency market, at an average cost of 2.7420 soles per U.S. dollar.

According to data provided by Deutsche Bank, the sol went up 0.1% to 2.7420 for every U.S. dollar yesterday, from 2.7450 the previous day, reflecting the sol’s strongest gain since December 2008.

Mario Guerrerro, an economist with Scotiabank Peru stated that Peruvian export industries, principally mining, purchased soles to pay income taxes and worker bonuses. Meanwhile, Peru’s central bank reports that as of of July 8, a greater influx of American dollars into the local economy strengthened the net worth of Peruvian banks to a total of $497 million, compared with $347 million in the four days between July 1 and July 5.

Seasonal factors, said Guerrero, have resulted in a greater demand for soles. “We could see pressure on the sol,” he said, “for a few more days and therefore further purchases by the central bank.”

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