(Removes extra characters in headline)
By Marco Aquino and Patricia Velez
LIMA Feb 24 Peru's President Ollanta Humala
reappointed his finance minister in a major cabinet reshuffle
late on Monday that also replaced the mines minister and made
the current housing minister his fifth prime minister.
Finance Minister Luis Miguel Castilla had offered his
resignation to Humala earlier on Monday, three government
sources said, following a spat with the outgoing prime minister
over a bid to raise the minimum wage.
Castilla has helped reassure investors that Humala, a former
left-leaning military officer, will continue to rely on orthodox
policies to manage the fast-growing country's economy.
Humala chose Housing Minister Rene Cornejo, the former head
of the state investment promotion agency Proinversion, to be his
new prime minister after making eight changes to his cabinet in
Monday night's televised swearing-in ceremony.
Cornejo, described by some as a Humala loyalist, had been
housing minister since the beginning of Humala's presidency in
Humala also replaced one of the top manager's of the
country's vast mineral wealth - Energy and Mines Minister Jorge
Merino - with Eleodoro Mayorga, a former petroleum economist
with the World Bank.
The surprise cabinet shuffle underscores the lingering
instability of the Humala government, which lurched to the right
amid anti-mining protests in 2011 before veering back toward the
center in recent years.
Outgoing Prime Minister Cesar Villanueva announced his
resignation earlier on Monday after just four months in power.
Villanueva's departure follows his public spat with Castilla
and first lady Nadine Heredia - a close adviser to Humala - over
whether the government was working on possibly raising the
Villanueva told a local newspaper last week he was
coordinating with the economy ministry on a new wage law, which
both Castilla and Heredia stridently denied.
Castilla's defense of Heredia and rebuttal on TV on Sunday
was widely interpreted as a way to embarrass Villanueva and push
him from power.
The awkward dispute has angered Heredia's critics, who say
she wields too much power for an unelected official and is using
her husband's presidency to launch her own political bid.
Humala has not commented on the disagreement.
Humala raised the minimum wage twice, to 750 soles ($267)
per month, after being elected on promises to make sure more
Peruvians benefit from Peru's status as the world's
third-largest copper and silver exporter and sixth-largest gold
Castilla is widely respected by investors but criticized by
leftists who voted for Humala before he turned to the right.
Castilla said raising the minimum wage again would hurt small
While Castilla remains in his position, Piero Ghezzi, a
former managing director with Barclays Capital who has
repeatedly been rumored to replace him as finance chief, has
joined the cabinet as production minister.
($1 = 2.81 soles)
(Additional reporting by Lucas Iberico Lozada, Writing by Mitra
Taj; Editing by James Dalgleish, Lisa Von Ahn, Bernard Orr and