* Country a magnet for foreign capital inflows
* Sol currency trading at 16-year high vs dollar
* Economy seen growing 6.3 percent in 2013 -Castilla
LIMA, Dec 22 Peru will launch an aggressive plan
to prepay up to $1.5 billion in debt in 2013 to try to stem the
Peruvian sol's appreciation by soaking up foreign currency in
the local market, Finance Minister Luis Miguel Castilla said on
"We are going to use and make prepayments of between $1
billion and $1.5 billion in 2013, and this will serve to absorb
some of the appreciating pressure that exists in the economy,"
the minister told a news conference.
Peru's sol closed on Friday at its strongest level
in more than 16 years, with a bid price of 2.558 per dollar.
Yield-hungry investors have poured money into emerging
markets such as Peru, which has expanded on average by 6 percent
a year in the last decade. It currently ranks as South America's
Castilla told reporters he forecasts 2013 economic growth at
6.3 percent, up from 6.0 percent previously. The new number
matches the government's growth forecast for 2012.
He also estimated that Peru's exports will expand 3.3
percent in 2013 to about $45.45 billion, recovering from a
projected 4 percent decline in 2012 stemming from weaker global
demand and lower metals prices.
The minister said an expected increase in the volume of
mineral shipments will help boost exports next year. Mining
accounts for 60 percent of export revenue in Peru, the world's
No. 2 copper and silver producer.
Castilla mentioned the possibility of debt prepayment during
an interview with Reuters nearly two months ago. He said the
debt prepayment was part of a "liability management policy" that
seeks to improve and extend the Andean country's debt profile.
Paying foreign bonds early would complement other measures
the government has applied to curb the sol's rally, such as
raising deposit requirements on bank accounts denominated in
dollars or allowing local pension funds to invest more money
Peru has local and foreign debt in dollars and soles that
are equivalent to about $36.6 billion, or nearly 20 percent of
gross domestic product. About $20 billion is foreign debt,
according to the central bank.