September 13, 2017 / 5:06 PM / 10 months ago

UPDATE 1-Peru central bank says export surge to pressure sol currency

(Adds quote from central bank president, data from presentation)

LIMA, Sept 13 (Reuters) - An influx of hard currency as Peru’s exports surge on rallying mineral prices will likely pressure the local sol currency to strengthen against the dollar, Peru’s central bank chief said on Wednesday.

Peru is the world’s second largest copper producer and an important exporter of other minerals whose climbing prices have helped the trade balance swing back into a surplus after a $2.9 billion deficit in 2015.

Central Bank President Julio Velarde said the central bank now expects a trade surplus of $5.1 billion this year, which would be the widest in five years.

“In other words, there’s an $8 billion turnaround in the balance of trade and that means there is pressure on the sol to strengthen,” Velarde told lawmakers in a presentation. “For next year, we expect the trade surplus to increase by $1.3 billion.”

The central bank has bought more than $5 billion to soften volatility in the local spot market as the sol has firmed about 3.5 percent against the dollar so far this year.

The bank attributed the sol’s gains to the dollar’s global depreciation as well as to exports that rose 21 percent year-on-year in the 12 months through June - well above any of Peru’s regional peers, according to Velarde’s presentation.

In the first seven months of 2017, Peru posted a $2.65 billion trade surplus.

Investments in mining exploration are also recovering thanks to improving mineral prices, the bank said.

The central bank also revised upward its forecast of 2018 inflation to 2.3 percent from 2 percent previously. (Reporting by Teresa Cespedes, writing by Mitra Taj, editing by G Crosse)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below