LIMA, Sept 8 (Reuters) - Peru will seek to swap up to $6 billion worth of its debt in dollars for debt in soles or other currencies as expectations for a hike in U.S. interest rates mount, the country's Finance Minister Alfredo Thorne said on Thursday.
Thorne said new bond issuance to reduce dollar debt would help Peru avoid more costly debt payments if the Federal Reserve starts tightening monetary policy as expected as early as this year.
"The idea is to withdraw expensive debt and issue cheap debt for up to $6 billion dollars," Thorne said on local television in his presentation of Peru's 2017 proposed budget to Congress.
Thorne said the government of newly-elected President Pedro Pablo Kuczynski, a former investment banker who took office July 28, would also aim to slash the amount of debt owed to multilateral institutions such as the World Bank by 43 percent.
The sol has gained 1.35 percent against the dollar this year amid expectations for interest rate hikes in the United States.
Last month Thorne said the government did not foresee the need for fresh debt to cover the 2016 and 2017 deficits, and would opt to issue new bonds in soles instead of dollars for any financing needs.
Reporting By Marco Aquino and Mitra Taj; editing by Diane Craft