Pedro Castillo appointed his cabinet but did not appoint an economy minister: the Peruvian stock market fell 6% and the sun hit an all-time low

Peruvian markets immersed in uncertainty Friday and the local currency fell to its all-time low, after the socialist president Pedro Castillo appointed a radical activist of his Marxist party at the head of a cabinet which does not yet have a minister of the economy.

Castillo, who took office on wednesday, named Thursday Guido Bellido at the head of his cabinet, close collaborator of the founder of the ruling Peru Libre party, the doctor Vladimir cerron, declared admirer of the leftist governments of Cuba, Venezuela and Bolivia.

Most of the 18 members of the Castillo cabinet are personalities or politicians close to the left. The new chancellor is Hector Béjar, an 85-year-old sociologist who in the 1960s led a short-lived Communist guerrilla group, the National Liberation Army (ELN), and is an intellectual very close to Cerrón, according to various sources.

The Vice-President of the Republic, Dina boluarte, from PL, is Minister of Inclusion, while the former congressman Hernando Cevallos, the legislator Roberto Sanchez and the sociologist Anahi durand, all from JPP, assumed in Health, Commerce and Women, respectively.

The former left-wing presidential candidate Ciro galvez will be in Culture and the school teacher Juan Cadillo, with several international awards for his work, was in Education.

Other ministers are Walter Ayala in defense, Juan Manuel Carrasco indoors, Victor Raul Mayta in Agriculture, Íber Maravi at work, Ivan Quispe in production, Juan Francisco Silva in transport and Geiner alvarado in Housing. It is also missing Science, portfolio of next creation.

For the portfolio of the Ministry of Energy and Mines, Castillo turned to the leader of the ruling left party Ivan Merino. Castillo had announced in his election campaign that he would seek increase mining taxes in the world’s second largest producer of copper, to have more funds and to finance a greater investment in Health Yes education.

The favorite of the Economics portfolio was the advisor to Castillo in the home stretch of the elections, the moderate economist Pedro Francké, but according to local reports Bellido’s appointment as prime minister ruled him out for the post.

Francke had appeased investors at various meetings and it was also the link with the president of the central bank, Julio Velarde, to whom Castillo has offered to remain in office.

Following these decisions, The Lima Stock Exchange fell 6% on Friday and the dollar broke all four soles for the first time. The general S & P / BVL Peru index, the most representative of the Lima Stock Exchange, fell 8.88% around noon and the dollar was trading at 4.06 soles, after closing 3.92 soles Tuesday, before two national holidays.

Castillo’s new government team must request a “vote of confidence” in the fragmented Congress, where the opposition of the center and the center-right is in the majority. A probable rejection of the cabinet would worsen the political crisis in the country, who last year had until three presidents in one week after demonstrations and clashes between the government and Congress.

“Our cabinet belongs to the people, it is due to the people and it is theirs”Castillo said on Twitter at Dawn, defending his government team. “Our commitment is with Peru and with no other interest than to devote each of our efforts to building a more just, free and worthy country. We will not disappoint your trust“He added.

The left-wing president attended a mass on Friday morning and withdrew without making a statement. An official military ceremony is scheduled later at the army headquarters.

“Everything will be fine, don’t worry”, Prime Minister Bellido managed to briefly talk about it to journalists, who also attended the mass with his cabinet.

In London, while investor expectations of a moderate Castillo government have been diluted. Peruvian dollar bonds due 2060 fell 1.4 cents to the dollar to trade at 88.8 cents, close to a month’s low. Meanwhile, the paper that expires in 2032 has grossed 1 cent, according to data from Refinitiv.

“It is probably too early to draw conclusions, but the initial tactics are not positive.Said Sailesh Lad of Axa Investment Managers. “We think there is going to be volatility, but I don’t think the panic has entered or that we are at the stage where (investors) have to leave the country.“, He said.

“This is the time to reflect, not to fall into provocations, most likely they want to sharpen the contradictions“He said on local radio RPP lawmaker Hernando Guerra García, spokesperson for Fuerza Popular, defeated presidential candidate Keiko Fujimori.

(With information from Telam, Reuters and AFP)

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