Peru's congressional leader supports keeping central bank chief

LIMA, Aug 6 (Reuters) – The leader of Peru’s Congress said on Friday that she is in favor of keeping the country’s Central Bank President Julio Velarde for another term, supporting similar calls from the left-wing administration that just took over.

Maria del Carmen Alva, a member of center-right party Popular Action, currently presides over a Congress whose majority sits in opposition to the new left-wing executive. Alva met with Velarde earlier on Friday.

“Alva expressed (to Velarde) her support as President of Congress, in case he decides to continue in the role, telling him this would ‘calm markets,’” according to a statement from her press office.

Newly inaugurated leftist president Pedro Castillo has also been asking Velarde to stay in his role, although the central banker has been noncommittal so far, only saying he will think about it.

The Central Bank declined to comment on Friday on the issue.

Peru’s Central Bank is independent from the executive, although both the government and Congress nominate its board of directors.

Velarde has been the Central Bank’s president since 2006 and earned worldwide recognition for making Peru one of Latin America’s most stable economies, even as political turmoil has dented that perception in recent months.

Peru’s stock exchange and currency have been battered this year as Castillo rose to power and ended up nominating a far-left prime minister, who belongs to the Marxist-Leninist party that helped Castillo win the election.

According to the statement, Velarde also told Alva that he expects Peru’s GDP growth to meet expectations of about 10.5% this year. He also said that high inflation is temporary and should be “normalizing itself” in the next few months.

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