Peru's leftist president-elect Pedro Castillo is seeking to reassure anxious investors by retaining key economic authorities after he takes office on 28 July.
Castillo, who won a 6 June run-off election, has said he wants Julio Velarde to stay on as central bank governor for another five years. Velarde, who has already served for 15 years, is credited with keeping copper-rich Peru on a steady macroeconomic course. He says he will decide whether to remain once Castillo has taken office.
Pedro Francke, Castillo's principal economic adviser and a candidate for finance minister, is urging the top banking regulator Socorro Heysen not to leave either.
Castillo has not named any of his 19 cabinet ministers, but advisers say to expect a broad, technocratic team drawing from centrist and leftist parties. Among the key portfolios is energy, which encompasses Peru's natural gas, LNG and modest oil sectors.
The direction of the abridged political transition so far suggests that Castillo is eschewing the radical plank of his Peru Libre party, which espouses nationalization of strategic industries and other state-directed policies.
Investor nerves were similarly assuaged today when an opposition-led slate was elected to lead the 130-member unicameral congress after the ticket including Peru Libre was disqualified on a technicality, even though it has 37 seats, more than any of the other nine parties and coalitions in the chamber. A two-thirds majority, or 87 votes, is needed to confirm senior appointments, such as central bank governor.
The opposition leadership is made up of right and center-right parties, a dynamic that is likely to make it difficult for Castillo to govern. Lima has a record of cutting short presidential terms.
Castillo denies that he will usher Peru down the tumultuous path of Venezuela, declaring on 23 July that he is not a communist and would not import economic prescriptions from other countries. His top advisers are pushing for continuity in top positions to help ensure growth and allow the administration to hit the ground running.
Castillo was not declared the official winner until 19 July because of complaints of alleged electoral fraud lodged by his conservative opponent, Keiko Fujimori. All of her allegations were dismissed and she now runs the risk of returning to prison because of a money-laundering investigation.
Peru's economy has rebounded sharply this year after contracting by 11pc in 2020 when the Covid-19 pandemic was in full swing. The economy expanded by 19.7pc in the first five months of 2021 compared with a year earlier. Export earnings, led by mining, were up by 59.6pc through May.
