Peru’s Castillo Names Francke as Finance Minister After Delay
Peru’s Castillo Names Francke as Finance Minister After Delay
(Bloomberg) -- Peru President Pedro Castillo named former World Bank economist Pedro Francke as his finance minister and swore him in late Friday evening following a delay that unnerved investors.
Francke advised Castillo on economic policy during the campaign and vowed to largely maintain the country’s macro-economic policies while putting more focus on social issues. He’ll be tasked with trying to maintain investor confidence amid doubts over policy direction under Castillo and his Marxist Peru Libre party while trying to revive an economy battered by recession and one of the worst Covid-19 death rates in the world.
The sol fell to a record low Friday and bond yields rose to the highest in seven weeks after Castillo failed to name a finance minister on Thursday during a ceremony to name his cabinet.
While Francke hasn’t made any public comments since then, Castillo’s controversial pick for prime minister, Guido Bellido, who is seen as an extreme left member of the alliance, expressed his support for Francke on social media.
Castillo, a former schoolteacher and union leader, emerged out of relative obscurity this year to win the presidency after consolidating support from Peru’s left-wing. He’s vowed to spend much more on education and health while seeking greater tax revenue from mining operations and wants to rewrite the constitution.
While investors have had concerns over Castillo’s proposed polices since his surprise first round win in April, Francke’s efforts to communicate with investors, the business community and the media had assuaged some concerns over how disruptive economic policy will be.
Francke, 60, has said that he’ll push for fiscally prudent measures while maintaining the country’s inflation-targeting regime. He also opposes the nationalization of companies.
Besides Bellido, Castillo also named a foreign minister who trained as a guerrilla in Cuba in the early 1960s and other allies from the more radical wing of the party.
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