PEN: Garcia's Second Chance

June 2006 | Currency Forecast

The presidential election is now over, and the Peruvian people have granted Alan Garcia the opportunity to redeem himself from his disastrous presidency from 1985-1990. We think the jury is certainly out from a policy standpoint, particularly since Congress remains fractured. But we certainly believe that he is a much more desirable president from an investment standpoint than his defeated second-round election opponent, nationalist Ollanta Humala. The bottom line for the sol is that despite strong macroeconomic fundamentals, the unit's advance is very likely to be checked by central bank intervention at PEN3.2500/US$. Should that level give way, further advances

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