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Left-wing candidate Pedro Castillo appears to be ready to Peru’A gripping presidential election was held on Monday and his economic proposal was clarified, a move that was clearly aimed at calming turbulent financial markets.
After counting 96% of the votes, Castillo His competitor, Keiko Fujimori, has an approval rating of 50.3% to 49.7%, which is 93,000 votes behind the 24.3 million potential voters. Earlier Monday, Fujimori had led by nearly 100,000 votes.
Many of the remaining votes come from rural areas, where Castillo is the strongest, although votes from Peruvians living abroad may support Fujimori It seems that they are not enough to tilt the balance in her direction.
Privately, some Fujimori supporters in Lima admitted defeat, although she accused of election fraud in a press conference on Monday, suggesting that if Castillo’s victory is confirmed, she may be ready to fight.
In anticipation of a possible victory for Castillo, Sol has depreciated sharply in recent weeks, falling more than 2% against the US dollar, trading to a historical low of 3.93.
The Peruvian stock market plummeted, and the S&P/BVL Peru Composite Index fell about 7% on the same day in New York. The country’s US dollar bonds are also under pressure. The price of banknotes maturing in 2050 fell by about 2% to 129 cents to the US dollar. Another type of U.S. dollar bond maturing in 2031 fell more than 1% against the U.S. dollar to 99 cents.
Citibank noted: “We expect Peruvian assets to fluctuate and note that given the fierce competition, demonstrations against the results of both parties are possible.”
Apparently to calm the market, Castillo’s team issued a statement outlining its economic plan. It is much more moderate than the election manifesto of his party, the Peruvian Liberal Party.
The statement read: “Our economic plan did not consider nationalization, expropriation, confiscation of savings, foreign exchange controls, price controls or import bans.”
Castillo’s team stated that they would “respect the autonomy of the central bank, and the central bank did a good job [of] Keep inflation low for more than two decades.”
However, it confirmed that as President Castillo will seek to increase taxes on mining companies to cover medical and education expenditures.
This election was an extraordinary quarrel between populists on both ends of the political spectrum.
Castillo was a rural elementary school teacher who later became a left-wing militant of the oppressed, and Fujimori was the widely disliked daughter of the former dictator of Peru, Alberto Fujimori.
The prospect of a victory for Castillo sparked Panic and capital flight Among the Peruvian elite. Since 2007, the Sol has depreciated against the U.S. dollar more than any other currency in the world. First round of voting In April, when Castillo became the front runner for the first time. In the past month, the trading volume of the US dollar against the Sol has increased by about 20%.
In its declaration, Free Peru advocated nationalization, tax increases, a new constitution and restrictions on imports from one of the world’s largest producers of copper, zinc and precious metals. In contrast, Fujimori defended Peru’s economic model to a large extent.
Castillo used a simple and powerful message to awaken the people of the poor and neglected villages in the Andes: “There are no more poor people in rich countries.” At the same time, Fujimori’s efforts to become the first female president of Peru were denied by her. The allegations of corruption are complicated.
No matter who wins, he won’t get a majority in Congress. Among the 130 seats in Peru’s unicameral parliament, Castillo’s party has 37 seats, while Fujimori’s party has only 24.
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