LIMA, Jan 28 (Reuters) - Peru’s central bank put a new limit on currency derivative operations in a bid to curb volatility and foreign speculation in the local spot market as the sol currency slips to new lows.
The policy raises reserve requirements on deposits in soles when swap and forward operations exceed certain levels, the central bank said late on Wednesday.
The move seeks to tame swings in the sol prompted by large derivative plays by traders, “in particular by economic agents who are not residents,” the bank said in a statement.
On Dec 31, the central bank unveiled initial efforts to rein in derivative operations that it said had fueled the sol’s 6.4 percent decline last year.
Since then, the sol has continued to slip. On Wednesday it weakened 0.30 percent to touch a more than five-year low, despite the central bank’s bid to offset losses by selling $115 million in the spot market.
Pedro Tuesta, an analyst with 4Cast, said the new policy was a form of foreign exchange control.
“Since they cannot control the exchange rate they are taking action to limit positions,” said Tuesta. “The target now is zero volatility.”
Reporting by Mitra Taj; Editing by Leslie Adler