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Left-wing candidate Pedro Castillo seemed ready for victory Peru ‘Monday’s tough presidential election and explained its economic proposals in a measure clearly designed to calm nervous financial markets.
With 96% of the votes counted, Castle had 50.3% to 49.7% for his rival Keiko Fujimori, a difference of 93,000 votes from a potential electorate of 24.3 million people. By Monday, Fujimori had advanced nearly 100,000 votes.
Many of the remaining amounts had to come from rural areas, where Castillo is the strongest, and although it is likely that the ballots of Peruvians residing abroad Fujimori it seems that they will not be enough to tip the scales in their direction.
In private, some Fujimori supporters in Lima admitted defeat, although he held a press conference on Monday alleging electoral fraud, suggesting he could be prepared to fight if Castillo’s victory is confirmed.
The sun, which has depreciated sharply in recent weeks in anticipation of a possible Castillo victory, lost more than 2% against the dollar to trade at an all-time low of 3.93.
Peruvian stocks plummeted, with the S & P / BVL Peru general index about 7% lower on the day in New York. The country’s dollar bonds also came under pressure. The price of a ticket that will have to mature in 2050 fell by about 2% to 129 cents on the dollar. Another dollar bond maturing in 2031 fell more than 1% to 99 cents on the dollar.
“We anticipate the volatility of Peruvian assets and note that demonstrations against the results of both parties are a possibility given the narrowness of the race,” Citibank noted.
In an apparent bid to calm the markets, Castillo’s team issued a statement explaining its economic plans. He was much more moderate than his party’s campaign manifesto, Peru Libre.
“We have not considered nationalization, expropriation, confiscation of savings, exchange controls, price controls or import bans in our economic plan,” the statement said.
Castillo’s team said it “would respect the autonomy of the central bank, which has done a good job [of] keeping inflation low for more than two decades ”.
He confirmed, however, that as president Castillo would try to raise taxes on mining companies to pay for health and education spending.
The elections have been an extraordinary conflict between populists from opposite ends of the political spectrum.
Castillo is a rural elementary school teacher who became a strong left-wing crusader for the oppressed, while Fujimori is the largely nasty daughter of Peru’s former authoritarian president, Alberto Fujimori.
The prospect of a Castillo victory has awakened panic and capital flight among the Peruvian elite. The sun has depreciated more against the dollar than any other currency in the world since first round of voting in April, when Castillo first appeared as a leader. Dollar-to-sun transactions have risen about 20% in the last month.
In its manifesto, Free Peru advocated nationalization, higher taxes, a new constitution and the limitation of imports in one of the world’s largest producers of copper, zinc and precious metals. Fujimori, on the other hand, largely defends Peru’s economic model.
Castillo has awakened people in poor, abandoned villages in the Andes with a simple but powerful message: “There are no poorer people in a rich country.” Meanwhile, Fujimori’s proposal to become Peru’s first female president has been complicated by allegations of corruption that she denies.
Whoever wins will not have a majority in Congress. Castillo’s party has 37 of the 130 seats in Peru’s unicameral parliament, while Fujimori’s has only 24.
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