LIMA, Peru—Leftist President-elect Ollanta Humala said he would retain the government's current central bank president, who is known as a tough inflation fighter, a sign of continuity in economic policy that buoyed investors.
Keeping Brown University-educated Julio Velarde, the first appointee to be announced by the government that takes over July 28, alleviates some of the uncertainties about Mr. Humala's economic philosophy that have depressed financial markets and the broader economy for months, analysts said.
"Velarde's appointment is the first solid indication that Humala has moderated not only his discourse but potentially his ideology as well," said Luis F. Zapata, a Peruvian who is head of Latin America Institutional Equity Sales with Canaccord Genuity. "Regardless of Humala saying otherwise to the local press, Velarde is an appointment meant to soothe the capital markets."
Lima's bourse rose sharply Monday, in the face of selloff that racked other global markets. Peru has been one of the world's fastest-growing economies, but Mr. Humala's view that the government must do more to ensure that economic benefits reach the poor has worried investors who are fearful of deficit spending.
The appointment may also help Mr. Humala regain the political initiative after a damaging scandal involving his younger brother, Alexis. This month, Alexis Humala, a businessman who speaks Russian, traveled to Moscow to meet government officials there to discuss energy, tourism and defense matters, even though he had no official role in the transition team.
Ollanta Humala, who had campaigned on a promise of transparent government, saw his approval rating fall to 41% from 70% in recent months, largely due to concerns about nepotism and corruption raised by the trip, according to a poll released Sunday by the Ipsos-Apoyo consulting firm. The president-elect made his first remarks on the affair Sunday, calling the trip "a grave error" and saying that he didn't know about it until after it had happened.
Polls show his popularity plummeted after the trip became public knowledge.
Ollanta Humala has faced his first scandal and he has not even put on the presidential sash.
Alexis Humala presented himself as an official Peruvian representative on a trip to Russia to discuss gas, fishery and arms deals.
The president-elect denied he had sent his brother and suspended him from his political party. Critics are calling for the younger brother's expulsion.
In a television interview, he called on his family not to try to take advantage of his new position of power.
During his successful campaign for the Peruvian presidency, Mr Humala sought to distance himself from the radical left-wing views of his father and other brothers.
They proved a liability in his last presidential bid in 2006, when he was defeated by Alan Garcia.
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