Peru on electoral tenterhooks, financial markets calmer

Peru's financial markets were calmer today even though the 6 June presidential run-off between two political extremes is still unresolved.

Far-left schoolteacher Pedro Castillo has maintained a narrow lead over Keiko Fujimori, a right-wing former lawmaker making her third presidential bid. According to electoral authority ONPE, Castillo has 50.25pc to Fujimori's 49.75pc with 98.1pc of the votes counted,

Final results might not be known for days as ballots trickle in from remote areas and abroad.

Fujimori is alleging fraud, as she did in her 2016 race.

Trading on Lima's stock market was briefly suspended yesterday after falling more than 7pc on news of Castillo's potential victory. Today the bourse made modest gains and the US dollar pulled back from a historic high against the local sol currency. The central bank intervened to help moderate exchange gyrations.

The less jittery market sentiment could reflect overtures by Castillo's Peru Libre party designed to assuage the business community's fears by affirming central bank autonomy and rejecting "expropriations, confiscations, price controls and bans on imports."

The statements are a departure from the party's original governing plan, written in 2020, that calls for the state to take over means of production and natural resources, including minerals and natural gas.

Peru is the world's second-largest copper producer and a major source of other metals, including gold, lead, silver and zinc. The country hosts South America's only export-oriented natural gas liquefaction complex, 4.4m t/yr Peru LNG.

The stock market in neighboring Chile, where big retailers such as Parque Arauco and Cencosud are heavily invested in Peru, was steadier today as well after steep losses yesterday.

By Lucien Chauvin