Category: Peru

The IMF has approved a 25-month stand-by arrangement worth about $257.7 million for Peru to support the country’s economic program. The Fund commented that “Peru has implemented sound economic policies which, in the context of a favorable external environment, have resulted in the longest economic expansion on record, low inflation, a robust external position, and declining vulnerabilities”. It added that the new government is “taking measures to further improve this excellent performance during 2007-08”. The Peruvian government have indicated that their intention is “to treat the arrangement as precautionary”, according to the Fund.

Cementos Lima, Peru’s largest cement maker, will launch $15.7 million-worth of local-denominated bonds. The eight-year bonds, which mature January 19, 2015, will be sold by BBVA Banco Continental , while the placement agents are Continental Bolsa.

Telefónica del Perú, the local subsidiary of the Spanish telco and Peru’s leading fixed-line provider, launched its bond issue Wednesday, hoping to sell up to $47 million worth (150 million pesos) in local debt securities. The transaction is being structured by BBVA Banco Continental, the placing agent is Continental Bolsa.

Peru’s president Alan García has named Laura Calderón Regjo the new president of Sunat, Peru’s tax and customs collection agency, moving former chief Nahil Hirsh to head up Conasev, the national supervisory commission for companies and securities. Calderón has worked at the economy ministry and at the Central Bank and is seen as an able technocrat.

Peru Copper Inc has named Gerald Wolfe as the company’s new president and chief executive, effective January 15, 2007. Wolfe is joining from Compañia Minera Antamina, where he has been president and CEO since 2005. David Lowell, Peru Copper’s executive chairman, praised Wolfe’s operational and technical credentials and added that he would offer invaluable experience for the development of the company’s Toromocho Copper Project in northern Peru.

Italy and Peru announced they had agreed a debt swap Thursday worth $72 million. Italy has agreed to forgive the debt in exchange for investing in social projects in the country. Italy’s representative for the deal, foreign minister Massimo D’Alema, on a visit to Peru, said that Italy saw great potential in increased investment in the Latin American nation. The debt swap agreement follows an earlier one struck in 2001 which exchanged $116 million of debt.

Peru’s minister of economy and finance, Luis Carranza, has predicted economic growth of 7.5% this year, the highest level seen in more than 10 years. Growth this year was driven by the country’s exports as well as increased private investment, said Carranza. In a press conference on Thursday, the minister said the government was committed to deliver long-term growth of between 6% and 7%.

Ratings agency Fitch has assigned a BB+ rating to Peru Enhanced Pass-Through Finance Limited, a Peruvian securitization of government payment obligations in connection with parts of the IIRSA Sur toll road concession. The approximate $635 million in transaction proceeds will be indirectly used to cover the costs of expansion and improvements on two sections of IIRSA Sur, a 2,500 kilometer network of existing toll roads crossing southern Peru.

Peru’s economy grew 9.82% in October, year on year, according to INEI, the country’s national statistics institute. Growth was driven by manufacturing, which expanded 9.4%. Meanwhile, mining and hydrocarbons, normally the engine of growth in the local economy was down 8.6%, the third month in a row this sector has seen a drop in production. GDP for the first 10 months of the year was up by 7.67%.

As expected, Peru’s Central Bank held its benchmark interest rate at 4.50% Thursday. The Bank said it had decided to hold the rate unchanged due to the benign inflationary environment. Consumer prices fell last month by 0.28%, taking inflation for the 12 months through November to 1.54%, at the bottom end of the government target range. Meanwhile, economic activity – driven by domestic demand – grew 6.9% in October, said the Bank, taking growth for the first 10 months of the year through October to 7.4%.