PERU: Election Uncertainty Set to Weigh on Local Assets in Extremely Tight Race
Jun-08 08:50
- The quick count from yesterday’s second-round presidential election run-off points to an extremely close race, with left-wing candidate Roberto Sanchez holding a very narrow lead over right-wing candidate Keiko Fujimori. An Ipsos quick count put Sanchez on 50.3%, vs. 49.7% for Fujimori, while a Datum quick count was even closer, putting Sanchez on 50.14%, vs. 49.86% for Fujimori. On both counts, Sanchez’s lead was within the poll's margin of error.
- In terms of the actual vote count, with 76% of ballots counted, Fujimori leads on 52%, vs. 48% for Sanchez. However, the count so far has been skewed towards urban areas where Fujimori is likely to perform better. Sanchez is expected to gain momentum as votes in the rural areas of the country are counted.
- The count in the more remote regions is expected to take some time, however, and allowing for challenges, a final outcome may not be known until mid-July, just ahead of the new president taking office on July 28. Speaking last night, Fujimori said that she will respect the results, when the count is over, while Sanchez sounded confident, but said that this is the moment to defend the vote.
- The likelihood of a protracted period of uncertainty and possible Sanchez victory is likely to weigh on local assets, especially the PEN. BBVA says that this could prompt the BCRP to consider a hike when it meets later this week, while JP Morgan expects a rate hike to come, potentially as soon as this week. However, they also note that the monthly meeting schedule gives the BCRP scope to wait for further data before acting.
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