© Reuters. File photo: Peruvian President Pedro Castillo walks out of Congress after being sworn in on July 28, 2021 in Lima, Peru.REUTERS/Angela Ponce/File Photo
LIMA (Reuters) -Peru’s Pedro Castillo appointed moderate economist Pedro Francke as finance minister late on Friday, an olive branch to rattled markets after the newly-elected president earlier named members of his Marxist Free Peru party to several other cabinet positions. Castillo Slightly appointed Guido Bellido as Prime Minister on Thursday. He is a hardliner and Marxist from the Andean city of Cusco. He is little known in Lima circles and initially restrained investors from being more moderate. The hope of the cabinet. The move hammered bond markets and the sol currency.But the swearing in later in the day of moderate left-wing economist Francke, a top adviser to Castillo who had helped the recently elected president soften his image, appeared aimed at soothing jittery investors.
Earlier in the evening, Prime Minister Bellido expressed his “full support” for the more moderate Frank on Twitter, saying that they would “work together for the country.” The day before, just a few minutes before the start, the newly appointed cabinet members held an oath ceremony, which exacerbated the drama and put the investors who supported Frank in the job into trouble. Most of the other members of Castillo’s cabinet were sworn in on Thursday. Ivan Merino, a little-known mining expert near FreePeru, was appointed to oversee the huge metal industry of the world’s second largest producer. Castillo, a self-proclaimed Marxist-Leninist, promised to raise taxes on miners in his campaign to support medical and educational reforms. As investors anxiously awaited Castillo’s choice of the key finance minister position, the market remained nervous throughout the day on Friday. “Don’t worry. Everything will be fine,” Bellido said in a brief comment to reporters earlier in the day. Investors are not at ease. The Peruvian currency, the Sol, fell to an all-time low, marking its biggest one-day drop in seven years. The local stock index fell nearly 6% at an intraday low and set its lowest closing price since November. Castillo, who took office on Wednesday, defended his new government on Twitter in the early hours of Friday morning. “Our cabinet belongs to the people. It is responsible to the people,” Castillo wrote. “Our commitment is a commitment to Peru, except for every effort made to build a more just, free and dignified country. We will not disappoint your trust.” Investors said The prospect of Peru under Castillo’s leadership is becoming more and more vigilant. Castillo defeated the conservative Keiko Fujimori by a narrow margin in the election last month. In an election campaign, he promised to distribute wealth more evenly, frightening the market, but won votes from the poor in rural Peru, and in recent weeks he seems to have adopted a more moderate strategy. After his victory, there was a political dispute between the radical left of his Liberal Peru Party and its more centrist allies.
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