Peruvian Investors Weigh Dollar Purchases Against Debt Reduction as โCurrencyโค Fluctuates
Lima, Peru โข- As the Peruvian Sol experiences volatility, investors are grapplingโค with a โkey financial decision: whether to convert savings into dollars โor prioritize paying down debt. Financial expert Gallesio recommends a tieredโฃ approach, starting with aโ 70/30 split favoring Soles for โnew investors, andโข emphasizing debt reduction alongside emergency fundโ building inโ the โคcurrent economic climate.
The fluctuating exchange rate and high personal โcredit costs in Peru create a complex โขlandscape for personal finance. This impacts a broad โฃrange of Peruvians, fromโ those just beginning to invest to individuals carrying meaningful debt burdens.The core question is whether to capitalize on aโฃ possibly favorable exchange rate by acquiring dollars, or toโค focus onโค mitigating the โคfinancial strain of expensive loans.
Gallesio proposes a simple initial formula: 70% of savings in โSoles and 30% in dollars. As savings increase, diversification into instruments like term deposits, mutual funds, and โ CTS (a Peruvian employee savingsโ account) should be considered.
However,โ the immediate priorityโ depends on โdebt levels. Ifโข debt carries an interest rate โexceeding 15% annually, it should beโ addressed first.โ Conversely,if debt is low and there’s no emergency fund,saving should take precedence.
“First reduces expensive debt and ensures a minimum emergency fund,” Gallesio โคadvises.โค “Than, diversify in soles and dollars โto โคprotect you from future risks.”
Specifically, the โadvice breaks down โto:
* convert all savings โคto โคa single coin.
* increase consumption because the dollar is โฃlow.
* โ Pay down debt if it’s vrey expensive (over 15% โper โyear).
*โค Save first if debt is low and there’s no emergency fund.
Readers โคseeking further analysis can findโ related coverage โon the current dollar pressures in Peru: The dollarโ under pressure:โค Whereโค does it go short and medium โterm?
This article was written by Carlos Rosales Salas, who โhas nine years of experience covering politics, economy, defense, and related topics in Peruvian media.