The purchases of Sol-denominated sovereign bonds by foreign investors will continue this year, BBVA Research
Chief Economist Hugo Perea has projected.
By the end of 2018, the purchases of sovereign bonds by non-resident investors totaled S/45 billion (around US$13.5 billion) and —at the end of last year— increased to S/59 billion (around US$17.7 billion).
Likewise, the percentage of sovereign bonds held by non-resident investors —compared to the total— rose from 44% in 2018 to 49% by the end of 2019.
"This is important to note, because we have witnessed great turbulence abroad, but non-resident investors have found it interesting to increase their positions in Peruvian sovereign bonds in a context in which the macroeconomic fundamentals of our economy remain very strong," Perea explained.
According to the BBVA Research officer, a few non-resident investors retreated from Peruvian sovereign bonds after the rise in political noise during the third quarter of 2019, although they returned by the end of last year.
"We assume that this interest will continue, albeit by a lesser extent than last year, probably," he underlined.
Perea remarked that investors' interest in Peruvian bonds is due to the higher returns they offer, compared to the papers in the northern hemisphere, where interest rates are negative.