Peru President Reformed The Police On the Day Country Issued Century Bond
Latin American country won the trusts of investors who purchased new debt that will mature in 2060
The new Peruvian president, Mr. Francisco Sagasti, on Monday ordered a reform in the police, appointed a new commander, and dismissed fifteen generals, in response to the violent repression of protesters in the short-lived previous government.
I have made the decision to appoint General César Augusto Cervantes as the new police commander, Mr. Sagasti has announced in a message to the country on television, six days after assuming power after the short-lived government of Mr. Manuel Merino.
These measures are intended to strengthen the police, added the centrist president.
With the appointment of Cervantes, fifteen police generals are retired, Interior Minister Mr. Rubén Vargas told RPP radio.
A long-expected change occurred on the day Peru issued debt that matures in 100 years.
"We want a police force that continues to defend democracy, fundamental rights, that gives us security and guarantees back," said Mr. Vargas.
A long-expected change occurred on the day Peru issued debt that matures in 100 years, looking for more liquidity.
The South American nation on Monday launched the sale of $1bn of century bonds, in addition to $2bn notes set to mature in 2060 and another $1bn of 12-year bonds.
But the economic turmoil follows political clashes that led to the election of three presidents in just the last two weeks.
The political backdrop is challenging, said Mr. Alberto Ramos, chief economist for Latin America at Goldman Sachs. On the other hand, we are living in a world with abundant liquidity.
We think that Peru is a solid investment-grade credit despite the political volatility, stated Ms Shamaila Khan, head of emerging market debt strategies at AllianceBernstein. The country has a strong external position and a low level of indebtedness.
Peru's GDP has more than quadrupled since 2000
due to Communist China's demand for its copper.
Peru has been one of Latin America’s fastest-growing economies this century. Its GDP has more than quadrupled since 2000, spurred by Chinese demand for its copper.
The price of a dollar bond set to mature in 2050 has decreased from 163 cents on the dollar at the start of the month to 158 cents. Its currency, the sol, has also suffered, hovering near a record low last week before strengthening slightly.
Despite the chaos, Peru was able to price the century bond at 1.70 percentage points above US Treasuries, said the person familiar with the sale. The benchmark 10-year US Treasury bond currently yields 0.85 per cent.