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PERU: BofA Recommends Long PEN, Local Bonds Positions

PERU
PeruEM BulletBulletGlobalEmerging Market NewsRegion
  • Following yesterday’s BCRP decision, when the central bank delivered the expected 25bp rate cut, but struck a more cautious data dependent tone, BofA recommends going long on the Peruvian sol, according to a report on Bloomberg. BofA says that stronger-than-expected growth, rising exports and record FX reserves will support the Peruvian sol. They have a 3.70 target on USDPEN, and a 3.90 stop.
  • BofA are also constructive on Peru local bonds, specifically bonds maturing in 2039, amidst expectations for further interest rate cuts. They expect the central bank to deliver another 50bp of cuts to 4.75% by year-end and a further 75bp to 4.0% by May next year.
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  • Following yesterday’s BCRP decision, when the central bank delivered the expected 25bp rate cut, but struck a more cautious data dependent tone, BofA recommends going long on the Peruvian sol, according to a report on Bloomberg. BofA says that stronger-than-expected growth, rising exports and record FX reserves will support the Peruvian sol. They have a 3.70 target on USDPEN, and a 3.90 stop.
  • BofA are also constructive on Peru local bonds, specifically bonds maturing in 2039, amidst expectations for further interest rate cuts. They expect the central bank to deliver another 50bp of cuts to 4.75% by year-end and a further 75bp to 4.0% by May next year.