PERU: Limited Market Reaction Expected After Boluarte Removed From Office
Oct-10 08:41
- In a sudden move overnight, President Boluarte was ousted from office after Congress voted unanimously to approve an impeachment to remove her. The vote was triggered as parties that had previously aligned with her switched sides amid criticism over her failure to rein in soaring crime, culminating in a shooting at a concert in Lima this week.
- She has been replaced by the leader of Congress, José Jerí, who was sworn in as interim president earlier today to complete the rest of the current term that ends in July 2026. Jeri has said he will uphold the election timetable, which will see general elections held in April next year.
- The vote to impeach Boluarte came amid a slump in her approval rating to around 3%, with Congress also angered by her comments to striking bus drivers against organised crime that they should ignore threats from gangs. Congress promptly filed five impeachment motions against her late on Thursday, alleging that was morally unfit to remain in office.
- Despite this sudden turn of events, JP Morgan does not expect there to be a major market impact. They note that political drama has long been a hallmark of the country’s political landscape over the past decade, with Jerí becoming the third president since 2021 and the seventh since July 2016.
- Similarly, BBVA notes that Jerí is centrist and seems to have good relations with both the left and right, enough to improve governability in the near-term and quell social unrest. If an acceptable cabinet is appointed and social demonstrations ease, they believe that adverse asset reactions, especially in PEN could be a quick fade.
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