Bonds News

Peru plans to issue up to $11.56 billion in bonds in 2021

LIMA, Aug 30 (Reuters) - Peru plans to issue bonds worth up to 40 billion soles ($11.56 billion) in 2021, almost four times more than expected this year, to help manage an economic crisis and the COVID-19 pandemic, according to government data released on Sunday.

The expected issuance is based on a projected exchange rate of 3.46 soles per U.S. dollar, according to the government’s 2021 debt plan, which was sent to Congress on Sunday. The issuance is planned for the domestic market but could be sold in international capital markets depending on market conditions.

The economy of the world’s No. 2 copper producer is set to shrink 12% this year, its worst performance in three decades, according to the government. But it expects a 10% rebound in 2021, fueled by recovery in domestic consumption and investment.

Peru imposed a quarantine in March when the virus broke out.

But since May the government has launched a staggered reopening of the economy bolstered by fiscal stimulus equivalent to almost 20% of gross domestic product. The Economy Ministry has said that public debt will rise to 38% of GDP in 2021, up almost 11 percentage points from 2019.

The government sent its 2021 public budget project to Congress on Saturday. It totals 183,000 million soles, an increase of 3.2% compared with this year’s spending plan.

Coronavirus cases totaled 647,166 in Peru as of Sunday, which has the second-highest number of infections in Latin America, after Brazil, and the fifth-highest in the world. Coronavirus-related deaths in Peru have totaled 28,788, according to the Ministry of Health. (Reporting by Marco Aquino Writing by Hugh Bronstein Editing by Paul Simao)