(Adds comment, updates price throughout) By Bansari Mayur Kamdar and Shreyashi Sanyal Jan 13 (Reuters) – The Chilean peso eased on Friday, following weak copper prices, while Peruvian sol fell following violent protests, amid growing hopes of small hikes by the US Federal Reserve. The peso slid 0.5% against the greenback as prices of the red metal, of which Chile is a major producer, took a breather after their strong rally this week. Latin American currencies have gained 2.8% so far this week and were on track for their second week of gains, in an upbeat start to January and 2023. Peru’s central bank raised its interest rate benchmark interest rate down 25 basis points to 7.75% on Thursday as the nation battles the highest inflation in a quarter century. “Although inflation has already shown signs of slowing, it is without conviction, and the central bank will seek to ensure that inflation returns to the target range,” said Mario Guerrero, deputy chief economist for Peru at Scotiabank. Thousands of people took to the streets of Lima, the capital of Peru, to peacefully protest against the new government and the new president, after weeks of bloody clashes sparked by the ousting of former president Pedro Castillo which have leaves at least 42 dead. “In the short term, the protests could put additional upward pressure on inflation,” wrote William Jackson, chief emerging markets economist at Capital Economics in a note. “Peru has been one of the fastest growing economies in the region for the past few decades, but it’s hard to see that continuing.” Sol has lagged its peers so far this year, up just 0.3%, against other Latin American currencies which have gained almost 3% each. Peru’s economy likely grew just under 2.9% last year, a senior central bank official said, suggesting the South American country’s economy grew less than expected , in part because of an outburst of social unrest that began in December. The Brazilian real was stable against the dollar. Data showed that economic activity in Brazil fell more than expected in November, in the fourth consecutive month of contraction. Shares of Brazilian state oil company Petrobras fell more than 1%. The government has officially appointed Jean Paul Prates as chief executive and board member, the company said. The Colombian peso fell 0.1% on Friday and has gained 3.5% so far this week. Emerging market bonds are starting the new year with a bang. Developing countries have sold $39 billion worth of international bonds since the start of 2023, with investors happy to take on riskier debt as they bet global interest rates are approaching a peak. Key Latin American Stock Indices & Currencies 1918 GMT: Stock Indices MSCI Emerging Markets Latest Daily Change 1030.79 Daily % Change Brazilian Real 5.0947 0.08 Mexican Peso 18.7438 0.44 Chilean Peso 825.9 -1.03 Colombian Peso 4684.56 -0.07 Peruvian Sol 3.8001 -0.68 Argentine Peso (interbank) 181.2600 -0.15 Argentine Peso (parallel) 365 -1.10 Sanyal to Bengaluru. Editing by Sharon Singleton and Alistair Bell)
Comments are closed.