Macroeconomic Forecast Peru

The recent sell-off of the Peruvian sol over global macro headwinds, resulted in the currency reaching a three-months low on September 22th of PEN2.783US$ but the unit has since pared back some losses to trade at PEN2.7715/US$. Given the market volatility, we see some downside risks to our end-2011 PEN2.70/US$ forecast. Despite those risks, we still believe the sol looks good for further appreciation over the coming months given the strong demand for Peruvian exports, combined with the continuing dedollarization of the Peruvian economy.

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