UPDATE 3-Peru central bank raising deposit requirements

(Adds details on sol’s strength)

LIMA, June 21 (BestGrowthStock) – Peru’s central bank said on
Monday it was raising minimum deposit requirements on bank
accounts denominated in U.S. dollars and soles, the latest bid
to restrict the money supply as the economy rebounds.

Peru’s economy is expected to grow as much as 7 percent
this year, one of the fastest rates in Latin America, and it
has seen heavy inflows of so-called speculative cash that have
helped cause the sol to rise to 2.82 per dollar.

The currency finished on Monday at its strongest closing
level in 22 months, and had its strongest intraday level since
March.

The move follows two interest rate hikes in the last two
months that raised the country’s base rate to 1.75 percent.

“This is an attempt to discourage short-term capital
inflows that look for speculative gains. What’s good for Peru
is that long-term capital enters the country that can
positively impact production,” said Jose Razuri, analyst at the
Maximixe consultancy in Lima.

So far this year, the sol has gained 2 percent and the
central bank has bought some $2.9 billion on the spot foreign
exchange market via interventions year to soak up excess dollar
liquidity. That is more than the amount it bought in all of
2009.

The tighter rules will take effect in July, the central
bank said.

Minimum deposits that must be kept in the central bank’s
accounts will rise to 2 percent from 1 percent, and those in
the offices of lenders to 7 percent from 6 percent.

Dollar accounts will also face a marginal deposit
requirement of 35 percent, up from 30 percent, while credits
from abroad will have marginal deposit requirements of 40
percent, up from 35 percent.

Stock Today
(Reporting by Patricia Velez and Ursula Scollo; editing by
Carol Bishopric)

UPDATE 3-Peru central bank raising deposit requirements