Early Market Close, Controversial Law Capping Interest Rates on Loans

{PE} Peru's Congress approved on Wednesday a law that will allow policymakers to cap interest rates on loans granted by banks, a controversial measure that has been deeply critiqued by the Andean nation's government and financial institutions.

The law empowers the country's central bank to set maximum and minimum interest rates every six months in order to regulate the loan market, a measure lawmakers said is necessary to protect Peruvians from abusive lending practices.

But the government of interim President Francisco Sagasti said the measure would only drive lending underground, where such restrictions might not apply. Economy Minister Waldo Mendoza said Sagasti would ask the country's Constitutional Tribunal to review the law.

*Peru stocks, bonds trade until 12pm Local on Lima Stock Exchange.