Left-wing candidate Pedro Castillo looked set to win in Peru’The presidential election opened on Monday and outlined its economic proposals in a move clearly designed to calm nervous financial markets.
With 96 percent of the vote counted, Castle had 50.3 percent to 49.7 percent for Keiko Fujimori, his rival – a difference of 93,000 votes from a potential electorate of 24.3 million people. By Monday Fujimori had had nearly 100,000 votes ahead.
Many of the remaining counties were to come from rural areas, where Castillo is the strongest, and although the votes of Peruvians living abroad are likely to favor them. Fujimori it seems that they will not be enough to turn the balance in their direction.
In private, some supporters of Fujimori in Lima admitted defeat, although she gave a press conference on Monday accusing him of electoral fraud, suggesting she might be ready to fight if Castillo’s victory is confirmed.
The sun, which has depreciated sharply in recent weeks in anticipation of a possible Castillo victory, has lost more than 2 percent against the dollar to trade at the historic low of 3.93.
Peruvian stocks fell, with the overall S & P / BVL Peru index about 7 percent lower on the day in New York. The country’s dollar bonds have also come under pressure. The price of a note that is due to mature in 2050 has dropped about 2 percent to 129 cents on the dollar. Another dollar bond matured in 2031 has fallen more than 1 percent to 99 cents on the dollar.
“We anticipate volatility for Peruvian assets and note that protests against the results by both sides are a possibility given the tightness of the course,” Citibank said.
In an apparent offer to calm the markets, Castillo’s team issued a statement outlining its economic plans. He was much more moderate than the campaign manifesto of his party, Peru Libre.
“We do not consider nationalization, expropriation, confiscation of savings, exchange controls, price controls or import bans in our economic plan,” the statement says.
Castillo’s team said it “will respect the autonomy of the central bank, which has done a good job [of] keep inflation low for more than two decades. “
However, he confirmed that, as President Castillo, he would seek to increase taxes for mining companies to pay for health and education expenses.
The elections were an extraordinary controversy between populists of opposite ends of the political spectrum.
Castillo is a rural primary school teacher who has become a left-wing crusader for the exploited, while Fujimori is the much despised daughter of former Peruvian authoritarian president Alberto Fujimori.
The prospect of a Castillo victory loomed panic and capital flight among the Peruvian elite. The sun is more depreciated against the dollar than any other currency in the world since first round of voting of April, when Castillo will emerge for the first time as a first boss. Dollar-sol transactions jumped about 20 percent last month.
In its manifesto, Free Peru promoted nationalization, higher taxes, a new constitution and a brake on imports into 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 aroused the people in the poor and neglected villages of the Andes with a simple but powerful message: “There are no more poor people in a rich country.” Meanwhile, Fujimori’s offer to become the first woman president of Peru has been compounded by allegations of corruption that she denied.
The winner 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 24.