Peru's sol slipped 0.31 percent on Friday to end the trading session at its weakest level in more than nine years despite the central bank's sale of $270 million in the local spot market to support the currency. The sol's losses followed news of shrinking manufacturing activity in China, one of the main buyers of Peru's key mineral exports.
Peru's central bank has ramped up its market interventions in recent weeks as the sol's slide accelerates ahead of an expected interest rate hike in the United States and following China's devaluation of the yuan. The sol has weakened 2.44 percent against the dollar so far this month even with the central bank selling $1.3 billion to prop it up.
The central bank has said it expects volatility in the local spot market to continue until the Federal Reserve decides on rates in September. In the meantime, central bank President Julio Velarde has said the bank still has plenty of dollar reserves to deploy to soften currency swings.
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