PEN Hits Record Lows - Eyes on Congress

As expected USDPEN opened higher and at record levels above 3.66.

• Congress forced Merino's resignation after just 5 days as President. Failed to appoint new interim leader, deepening the power vacuum.
• Congress reconvenes at 1400Local/1900GMT.
• Consensus over a new president will be needed to calm the building political crisis that is building.
• Further lack of clarity could well spark further social unrest and may also prompt the central bank to intervene to calm financial markets.
• They repeated on Friday that they will make use of large reserves to prevent any FX overreactions.
• JPMorgan notes: if political uncertainty lingers going into the 2021 general elections setting pressure on rates, we can't discard the possibility of the government following the steps of Colombia in resorting to the IMF FCL credit line.