In a global scenario marked by the volatility and strengthening of the dollar after the victory of Donald Trump in the presidential elections of the United States, the Peruvian Sun (PEN) has demonstrated remarkable stability. During 2024, the PEN depreciated only 1.3%, closing the year at S/3.76 per dollar, very close to the estimation of Credicorpcapital of S/3.75.
In the report “LATAM coins still sailing the ‘Trump Trade’, implying high uncertainty”They explain that healthy macro foundations translate into the relative behavior of the PEN. The constructive vision of the currency is supported by: strong external accounts, with terms of exchange in historical maximums and record commercial surplus, projecting three consecutive years of surplus in current account (2023-2025), something not seen since 2005-07; Low public debt (~ 34% of GDP) despite recent fiscal deficits; and high international reserves (29% of GDP). This contrasts with the deficits of other regional economies.
Chancay port and its impact on the Peruvian economy
“We do not rule out that Chancay is already beginning to influence medium and long term expectations,” says the report.
In various scenarios, the port of Chancay represents an important milestone for the Peruvian economy. Although there are challenges that must be overcome to maximize their potential, the port will not only allow companies to benefit from greater commercial integration, lower costs and the development of new export products, but also facilitate Take advantage of structural changes in global tradedriven by geopolitical risks and protectionist measures in several countries.
These factors will probably continue to encourage various economies, such as Asians, to look for new markets.
Other important factors
According to Credicorpcapital, the relatively favorable behavior of the PEN in recent months is also supported in:
- The active and successful intervention of the BCRP with a sapop sala sale balance that still remains at high levels.
- An evident success in the inflation control that currently places it at the mid -target range (2%) with a reference interest rate near neutrality (currently in 4.75%).
- A sustained recovery of the Peruvian economy in the last year in line with our expectations, reaching an expansion rate of 3.9% annual in Nov-24 and an advance of 3.2-3.3% in all 2024.
This last figure, although insufficient to close gaps in Peru, contrasts in a favorable way with expected rates for countries such as Colombia (1.8%), Chile (2.4%) or Mexico (1.6%). In fact, according to its projections, Peru would register the greatest growth (2.8%) among large countries in the region in 2025.
Trump measures and global volatility
The measures announced by the Trump government, especially in commercial matters, will be key in the coming months. As stressed in a November 2024 report, the market has expressed concern about the possible impact of tariffs on inflation in the US, global growth (especially in China) and commodities prices, as well as for Fiscal effects of tax reduction proposals.
This has raised the expectations about the interest rates of the Fed, which went from 3% in September 2024 to 4%, promoting an appreciation of 7.1% in the global dollar (DXY) during that period. Uncertainty and volatility are expected to remain high as Trump’s specific policies be known.
In the case of Peru, its commercial exhibition both to China and the US is significant. Despite this, we maintain a relatively positive vision about the PEN. Although we anticipate volatility in 2025 while the uncertainty for Trump’s policies persists, we hope that the USDPEN closes the year around S/3.75, backed by solid foundations and a surplus context.
Source: Larepublica
Alia is a professional author and journalist, working at 247 news agency. She writes on various topics from economy news to general interest pieces, providing readers with relevant and informative content. With years of experience, she brings a unique perspective and in-depth analysis to her work.
