The conflict in the Middle East has had a more significant impact on Peruvian markets than the upcoming general elections. Just two days before the vote, the dollar has decreased in value, now standing at approximately S/3.37, following a truce in the confrontation between the United States and Iran. This international calm has led to an increase in demand for Peruvian debt, reflecting renewed interest in local assets.
According to Hugo Perea, chief economist at BBVA Research, the behavior of the exchange rate and the bond market has been favorable due to the recent pause in the military conflict. ‘The elections have not generated significant nervousness in the markets. The current dynamics are more related to external factors,’ commented Perea. Additionally, the recent drop in oil prices, which saw a decline of up to 16%, has also contributed to reducing risk aversion among investors.
In this regard, two sovereign bond issuances by the Ministry of Economy have been observed, with demand exceeding supply, demonstrating a renewed appetite for Peruvian debt. As we reported in this note, the country’s trade balance has been in surplus, reinforcing the stability of the exchange rate. The true impact of the elections will be clearly seen after April 12, when candidates for the second round are defined.
