Background on Dina Boluarte and Her Administration
Dina Boluarte, the current President of Peru, took office at the end of 2022 following the removal of her predecessor. Since then, Boluarte’s popularity has plummeted to historically low levels. According to a recent Ipsos survey, her approval rating has dropped from 3% in April to just 2%. This decline reflects growing public dissatisfaction with her administration.
The Recent Cabinet Shuffle
On Wednesday, Boluarte appointed lawyer Eduardo Arana as the new Prime Minister, following a partial cabinet reshuffle due to criticism over rising crime rates and the recent massacre of 13 mining workers. Arana, who previously served as Minister of Justice, replaced Gustavo Adrianzén, who resigned on Tuesday amidst anticipated votes for his censure in Congress. This episode underscores the ongoing political instability in the Andean nation.
Following Adrianzén’s resignation, all cabinet members tendered their resignations to Boluarte, who subsequently reappointed all her functionaries. Among them was Economy Minister Raúl Pérez, who assumed his role on Tuesday after José Salardi occupied the position only three months prior. The sole change in the cabinet was in the Justice Ministry, where Juan Alcántara, formerly deputy minister, joined the team.
Arana and Pérez now become the fourth individuals to hold their respective positions during Boluarte’s tenure. Peru has experienced high ministerial turnover since 2018, with the country having had six presidents due to resignations or dismissals.
Impact on Peruvian Economy
In the financial markets, Peruvian assets have underperformed, with the local currency, the sol, falling 0.6% against the dollar. Meanwhile, the regional exchange rate index saw a slight increase during the day.
Peruvian sovereign bonds in dollars also faced pressure, with all maturities beyond 2050 dropping approximately one cent. Despite this, Peruvian eurobonds continue to boast some of the tightest spreads in the region.
Crime and Security Concerns
Peru is currently grappling with a surge in extortion and homicide cases, reaching record levels. This escalating crime wave has further eroded public confidence in Boluarte’s administration and fueled calls for change.
Key Questions and Answers
- Who is Dina Boluarte? Dina Boluarte is the current President of Peru, who assumed office at the end of 2022 following the removal of her predecessor.
- Why is there political turbulence in Peru? The political instability in Peru stems from a high rate of presidential turnover since 2018, with six different leaders taking office due to resignations or dismissals. Additionally, rising crime rates and public dissatisfaction with Boluarte’s administration have contributed to the ongoing turmoil.
- What changes occurred in Boluarte’s cabinet? Following criticism over rising crime rates and the recent massacre of mining workers, Boluarte reshuffled her cabinet. Eduardo Arana was appointed as the new Prime Minister, replacing Gustavo Adrianzén, who resigned amidst anticipated votes for his censure in Congress. Juan Alcántara joined the Justice Ministry as deputy minister.
- How have financial markets reacted to these changes? Peruvian assets have underperformed, with the sol falling 0.6% against the dollar. Peruvian sovereign bonds in dollars have also faced pressure, with all maturities beyond 2050 dropping approximately one cent. However, Peruvian eurobonds continue to have some of the tightest spreads in the region.
