Peru: Peruvian sol rises to highest level in almost fifteen years
November 30, 2011
On 30 November, the Peruvian sol (PEN) traded at 2.70 per USD, which represented a 0.2% nominal appreciation compared with the previous month and marked the strongest level since September 1997. At the current level, the sol is trading 4.8% stronger than the same month last year and has appreciated an accumulated 3.9% versus the USD this year. The recent sharp appreciation of the sol, which follows similar patterns observed in other emerging market currencies, was mainly driven by high volatility in the global financial markets and increasing concerns about the Eurozone debt crisis. Consequently, the Central Bank intervened in the foreign exchange market on 1 December and purchased USD 326 million at an average rate of PEN 2.69 per USD. The Bank's move represented the biggest purchase since July 2010, when monetary authorities purchased USD 494 million in order to stem the PEN's appreciation.
Author: Ricardo Aceves, Senior Economist