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5/13/09

Peru's Nuevo Sol (PEN) currency weakens sharply

On the back of the 1+% drop in the Nuevo Sol (PEN), the currency dropped another 1.5% today. The move is being explained by "strong demand from local banks to cover short dollar positions".

Or in other words, the dumbasses in suits in Peru actually started to believe the hype that FinMin Carranza has been dishing out recently. In the end, money talks and BS walks and the move charted out above isn't some orderly downward move conducted by the Central Bank. It's semi-panic as people with money run for cover. Joe Public will find out the truth once the money dudes have covered their tushes. DYODD.