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FILE IMAGE. A money changer holds up Peruvian soles bills on a street in Lima, Peru
LIMA, March 11 (Archyde.com) – A greater supply of dollars from the mining sector in Peru, which enjoys high metal prices, is boosting the local currency, which has accumulated a gain of around 7% so far this year. the central bank said on Friday.
The manager of economic studies of the Central Bank, Adrián Armas, affirmed that due to the current record prices of metals, taxes on mining income greater than 6,000 million soles (1,620 million dollars) are expected this year, an amount that in large part they will be from the dollars that they would earn from mining.
“With the record prices of commodities, collection is improved, therefore (also) the supply of dollars from mining,” Armas said during a conference call.
The sol rose 0.22% on Friday, to 3.704/3.705 units per dollar, at the levels of mid-May last year, and has accumulated an appreciation of 7.17% since the beginning of the year. On the day, the exchange rate had advanced to 3,680/3,685 soles per dollar.
Most Latin American currencies have appreciated this year, following a sharp crash in 2021.
The rise in the sun also comes a day following the central bank raised its interest rate to 4% from 3.5% amid inflationary pressures.
In the midst of the supply of dollars from the mining sector, there is a lower demand for foreign currency from financial agents in Peru, compared to the scenario of nervousness and high local political uncertainty that existed last year. “This demand for dollars has been falling significantly,” said Armas.
The official said that the factors that can stop the advance of the sun is the global uncertainty due to the conflict between Russia and Ukraine, and how the markets that expect a rise in the interest rate of the Federal Reserve in the United States will respond.
“But the force that makes the sun shine is actually the very strength of the Peruvian economy,” he said.
Regarding inflation, Armas stated that due to the increase in international prices of raw materials and food, mainly, the expectation of a return of local inflation within the annualized target range has been postponed until the first half of 2023, between 1% and 3%.
Before it was expected for the last quarter of this year.
Armas also assured that the Peruvian economy would have grown in January at a year-on-year rate equal to that of December, when it grew by 1.72%. A recovery is expected in February, he added.
“The central bank of Peru has been adjusting the monetary policy rate in a prudent manner, watching how the economy is developing and how inflation evolves with the aim of guaranteeing that it returns to its target range,” he said.
(Report by Marco Aquino and Vicente Valdivia, Edited by Manuel Farías)