Peru’s sol currency has started to depreciate recently, a trend that Finance Minister Luis Miguel Castilla says will continue into next year.
Castilla said he expects the sol to trade at levels around 2.90 per U.S. dollar next year, financial daily Gestion reported. That would be weaker than the current rate of 2.855, which is the weakest in the last several years.
During the past decade, the sol strengthened steadily as investments flowed into the Peruvian economy and the dollar weakened due to the Federal Reserve’s bond buying program. The sol appreciated against the dollar, almost reaching 2.50 per dollar at the start of 2013.
Since then, it has weakened as the bond buying program has been eased in the United States and local economic growth has slowed down.
Castilla’s comments came during a presentation in Congress, where the government presented its budget for next year and its outlook for the economy.
Castilla said he expects the economy to grow 6% in 2015, with inflation reaching about 2%. He said Peru would also post a trade deficit of about $2 billion.