Category: Peru

Peru’s economy expanded by 9.22% in January, the strongest year-on-year growth for this month in the past 11 years, according to national statistics agency INEI. Retail and manufacturing led growth, expanding 13.8% and 11.5% respectively. Construction was up by 11%. However, the mining and hydrocarbons sector contracted by 1%, largely due to a drop in output of gold as well as a lesser fall-off in copper and tin production.

Peru tapped its local currency 2026 bonds on Monday to sell $62.8 million worth (200 million soles) of the domestic paper. The funds raised will be used to meet non-financial public sector financing needs. The bond, which carries an 8.20% coupon was priced above par to yield 6.30%.

Peru is set to remove tax exemptions on capital gains in the stock market and interest on bonds, according to the country’s finance minister, Luiz Carranza. From 2009, a tax rate of 5% will be applied to capital gains on stock investments. However, capital gains and interest on government-issued paper will remain tax exempt.

Preliminary figures from Peru’s Central Bank show that February’s trade surplus widened to $473 million, 10% up on the same month last year. Total exports rose to $1.83 billion, up 26% year on year, set against imports of $1.36 billion, 32% up on the same month last year.

Banco de Credito del Perú and BBVA Banco Continental have benefited from the improving conditions of the sovereign rating of the Republic of Peru and have both had their Moody’s B1 long-term foreign currency deposit ratings placed on review for possible upgrade. The Agency also placed on review for possible upgrade the Ba2 rating for the $120 million in subordinated notes maturing in 2021 issued by Banco de Credito del Perú’s Panama branch.

Moody’s Investor Service has placed Peru’s BB+ foreign currency rating on review for a possible upgrade. Peru’s sovereign debt credit rating got a boost on Tuesday after Fitch Ratings changed its outlook on the country’s ratings to positive from stable.

Former Peru prime minister, Pedro Pablo Kuczynski has joined the emerging market investment specialist The Rohatyn Group as a senior advisor. Kuczynski will help develop private equity investments with a focus on Latin America, said the firm. Prior to becoming prime minister of Peru in 2001, Kuczynski served as minister of economy and finance, as well as minister of energy and mines. From 1994 to 2001, he was president and chief executive of the Latin America Enterprise Fund, a private equity firm.

Peru’s sovereign debt credit rating got a boost on Tuesday after Fitch Ratings changed its outlook on the country’s ratings to positive from stable, commenting that it believed “favorable public finance and external account trends will continue,” raising the likelihood of an upgrade “over a horizon of two years”. However, the agency warned that the concentrated nature of the country’s export base in commodities remained a “key credit weakness”. Peru is currently rated BB+ by Fitch, just one level below investment grade. The sovereign also carries a BB+ rating from Standard & Poor’s.

In Peru, the price of food, clothing and education drove up prices in February by 0.26%, the fastest rise in 10 months. Annual inflation for the 12 months through February fell to 0.36%, the lowest rate seen since August 2002.