By Teresa Cespedes
LIMA, Dec 22 (Reuters) - Peru's finance minister stepped down on Tuesday, and President Alan Garcia named a former trade and production minister to replace Luis Carranza, who helped steer the country's mining-heavy economy to investment-grade status.
Mercedes Araoz, who helped implement a free-trade pact with the United States, will take over as Garcia's top economic adviser, the president told reporters.
Peruvian stock, bond and currency markets took the announcement in stride as Araoz is expected to maintain the government's market-friendly policies.
Araoz, who will leave her post as minister of production, is one of the longest serving members of Garcia's cabinet. She belongs to Garcia's APRA party and at times has been mentioned by business leaders as a possible presidential candidate in 2011; Garcia would not be able to run then because of a constitutional limit.
We need to 'maintain economic growth and facilitate public and private investment for next year,' Araoz said on CPN radio.
Garcia said Carranza was leaving for personal reasons. There had been speculation he would step down from his post after the country obtained a coveted investment-grade rating last week from Moody's.
Though the economic stimulus package Carranza oversaw this year was often bogged down in bureaucratic red tape, the Moody's upgrade provided him with a positive note to leave on.
It was the third such rating granted by a major credit rating agency and should help lowers borrowing costs for the Andean country.
Carranza was finance minister from 2006 to mid-2008 and was tapped by Garcia to take the post again last January as the country headed into a sharp slowdown.
'We had an agreement that it was for a set period of time because he was dedicated to academic and private activities,' Garcia said on Tuesday.
Carranza, who is widely seen as the architect of Peru's sizzling economic growth in recent years, quit as the the country tries to rebound from the global economic crisis.
The Peruvian economy, which grew nearly 10 percent last year, has barely expanded this year as the worldwide slowdown depressed prices for most of the country's metal exports and cooled domestic demand. The government expects the economy to rebound and grow 5 percent next year.
Peru has won investment grade ratings from all three major credit agencies, which have cited the country's ability to withstand the global downturn better than its peers.
Carranza pioneered an ambitious plan that included paying down foreign debt early, which helped to prompt the upgrades last year by Fitch and Standard & Poor's.
Araoz is a U.S.-trained economist and holds a master's degree in economics from the University of Miami.
Before joining Garcia's government in 2006, she was the executive director of the state-run National Council of Competitivity.
Some opposition leaders warned that Araoz's openness to foreign trade could potentially pose a problem for Peruvian businesses.
'Her taking over the ministry is going to mean that national industry is going to be abandoned,' said Daniel Abugattas, a congressman from the leftist Nationalist Party.
(Additional reporting by Marco Aquino, Patricia Velez; Writing by Kevin Gray; Editing by Leslie Adler) Keywords: PERU ECONOMY/ (kevin.gray@thomsonreuters.com; +54 11 4510-2505; Reuters Messaging: kevin.gray.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
LIMA, Dec 22 (Reuters) - Peru's finance minister stepped down on Tuesday, and President Alan Garcia named a former trade and production minister to replace Luis Carranza, who helped steer the country's mining-heavy economy to investment-grade status.
Mercedes Araoz, who helped implement a free-trade pact with the United States, will take over as Garcia's top economic adviser, the president told reporters.
Peruvian stock, bond and currency markets took the announcement in stride as Araoz is expected to maintain the government's market-friendly policies.
Araoz, who will leave her post as minister of production, is one of the longest serving members of Garcia's cabinet. She belongs to Garcia's APRA party and at times has been mentioned by business leaders as a possible presidential candidate in 2011; Garcia would not be able to run then because of a constitutional limit.
We need to 'maintain economic growth and facilitate public and private investment for next year,' Araoz said on CPN radio.
Garcia said Carranza was leaving for personal reasons. There had been speculation he would step down from his post after the country obtained a coveted investment-grade rating last week from Moody's.
Though the economic stimulus package Carranza oversaw this year was often bogged down in bureaucratic red tape, the Moody's upgrade provided him with a positive note to leave on.
It was the third such rating granted by a major credit rating agency and should help lowers borrowing costs for the Andean country.
Carranza was finance minister from 2006 to mid-2008 and was tapped by Garcia to take the post again last January as the country headed into a sharp slowdown.
'We had an agreement that it was for a set period of time because he was dedicated to academic and private activities,' Garcia said on Tuesday.
Carranza, who is widely seen as the architect of Peru's sizzling economic growth in recent years, quit as the the country tries to rebound from the global economic crisis.
The Peruvian economy, which grew nearly 10 percent last year, has barely expanded this year as the worldwide slowdown depressed prices for most of the country's metal exports and cooled domestic demand. The government expects the economy to rebound and grow 5 percent next year.
Peru has won investment grade ratings from all three major credit agencies, which have cited the country's ability to withstand the global downturn better than its peers.
Carranza pioneered an ambitious plan that included paying down foreign debt early, which helped to prompt the upgrades last year by Fitch and Standard & Poor's.
Araoz is a U.S.-trained economist and holds a master's degree in economics from the University of Miami.
Before joining Garcia's government in 2006, she was the executive director of the state-run National Council of Competitivity.
Some opposition leaders warned that Araoz's openness to foreign trade could potentially pose a problem for Peruvian businesses.
'Her taking over the ministry is going to mean that national industry is going to be abandoned,' said Daniel Abugattas, a congressman from the leftist Nationalist Party.
(Additional reporting by Marco Aquino, Patricia Velez; Writing by Kevin Gray; Editing by Leslie Adler) Keywords: PERU ECONOMY/ (kevin.gray@thomsonreuters.com; +54 11 4510-2505; Reuters Messaging: kevin.gray.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.