During March, foreign holdings of Peru Soberanos declined by about PEN2.2bn, to 47.8% of the total from 49.6% in February. Foreigners sold positions across almost the entire Soberanos curve, with 34s, 32s and 28s experiencing the largest reductions. During the month, international investors were the main sellers and pension funds were the main buyers. As expected, the decline in foreign holdings was in line with the underperformance of the Soberanos curve. Political noise, an impeachment vote, a potential new pension withdrawal round, and S&P’s downgrade of Peru’s credit rating might have influenced investors’ decision to reduce Soberanos holdings; and although economic activity remains positive, political uncertainty and its potential impact on the economy remain a concern.