Leading race, Humala further softens tone in Peru

Reuters News
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Posted: Mar 28, 2011 3:06 PM

By Terry Wade and Patricia Velez

LIMA (Reuters) - Peru's presidential front-runner Ollanta Humala said on Monday he would respect free-trade agreements and the central bank's independence as he tries to persuade voters he is no longer a left-wing hard-liner.

In what was the most moderate speech of his political life, Humala also said that he would be fiscally responsible and said financial markets worried about his rise in the polls have no reason to fear him.

Despite his speech, Peru's sol fell to a three-month low of 2.813 per dollar on Monday as traders worried Humala might unwind market-friendly policies that have been in place for the last two decades in one of the world's fastest-growing economies.

"The existence of an independent central bank presupposes that political demagogues cannot influence the decisions of our monetary authority, which knows how to defend stability and financial reserves" from speculators, he said.

Humala, who nearly won the 2006 race on an ultranationalist platform endorsed by Venezuelan President Hugo Chavez, sought to give his latest pledges extra weight by codifying them in a letter he read to the Peruvian people and signing it in public.

The tactic was borrowed from the playbook of former Brazilian leader Luiz Inacio Lula da Silva, who won the presidency in 2002 on his fourth try by casting himself as a moderate who had outgrown his hard-left roots.

Humala, who has recently taken to wearing ties, has also hired campaign consultants with links to Lula's Workers' Party.

Two polls on Sunday showed Humala had a tiny lead in what has become an unprecedented five-way race ahead of the April 10 vote.

Humala has pulled support away from former President Alejandro Toledo, the architect of Peru's trade pact with the United States.

Toledo had been the leader but now trails Humala by a couple of percentage points. The polls show Humala would likely lose a second round vote on June 5 against any of his four potential opponents, all of whom are more trusted by investors.

(Reporting by Terry Wade and Patricia Velez; Editing by Xavier Briand)