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Finance Ministry Takes Control of PetroPeru, BCRP Decision Due Thursday

PERU
  • According to a notice published in the federal gazette on Saturday, Peru’s finance ministry has taken control of state-owned oil company PetroPeru from the energy and mines ministry. The finance ministry will now control a majority of its shares, according to the decree.
  • For reference, Fitch Ratings downgraded the company’s debt by three levels to B+, four notches below investment grade, on Wednesday due to the government’s lack of commitment to supporting the struggling oil firm. According to a Bloomberg report, Finance ministry control could lead to changes on the board of directors, whose chairman has led the charge in asking for a cash infusion.
  • Separately, the central bank is expected to maintain the gradual pace of easing on Thursday, cutting the reference rate by 25bps to 6.25%. However, further progress on inflation has sparked debate among analysts as to whether the easing pace should be accelerated.

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