2013.03.2606:09:34UTC+00Sol moves forward to one month high as Peru looks for energy investment

Peru’s sol increase to its highest level in a month as the government’s plans to double investment in its offshore oil and natural gas sector stoked the view for overseas capital penetrating the country.

The sol progress with 0.2 percent to 2.5830 per U.S. dollar at the close of trading in Lima, according to prices from Datatec. The central bank announced on its website today it purchased $120 million dollars for 2.5859 soles each in the spot market.

Peru, which has lined up $20 billion in energy projects through 2018 in a bid to double oil and gas output, plans to bid rights to improve 36 new oil and gas blocks, Luis Ortigas, the president of state oil contracting agency Perupetro, announced today in Lima. The declaration shows “continued positive sentiment” regarding foreign direct investment in Peru, stated Bret Rosen, a Latin America strategist at Standard Chartered Bank in New York.

“It is beneficial, not super huge, but part of the overall FDI story which is important to the sol,” Rosen said today in an emailed letter. “They want long-term capital in the country.”

The yield on the nation’s standard 7.84 percent sol bond due August 2020 drop one basis point, or 0.01 percentage point, to 3.79 percent at 4:21 p.m. in New York. The extra yield investors request to own Peruvian government bonds rather than the U.S. Treasuries dropped five basis points to 144 basis points, according to JPMorgan Chase & Co.