Peru's Congress votes to debate impeachment of President Boluarte

Peru's Congress unanimously removed President Dina Boluarte, citing accusations of illicit enrichment and her government's response to protests, further exacerbating the nation's political instability. This ouster, occurring without a clear successor and following a period of extremely low approval, highlights Peru's chronic governance challenges, with six presidents in six years, and introduces renewed uncertainty for investors regarding policy continuity and market stability.

Analysis

Peru's Congress unanimously removed President Dina Boluarte on grounds of "moral incapacity," following accusations of illicit enrichment, including undeclared assets and Rolex watches, and lethal crackdowns on protests. This ouster occurred amidst her extremely low approval ratings, ranging from 2% to 4%, signaling a complete loss of political legitimacy.

This event underscores Peru's chronic political instability, marking the sixth presidential change since 2018, with three former leaders currently incarcerated. The absence of a clear successor following Boluarte's removal introduces significant governance uncertainty and potential for a power vacuum.

The political upheaval, characterized by a revolving door of leadership and allegations of corruption, creates substantial policy continuity risks for investors in this emerging market. The shift in support from historically allied right-wing parties, whose leaders are expected to contest the 2026 presidential election, suggests a volatile political landscape and potential for further social unrest.

Key Decisions for Investors

• Closely monitor the political transition in Peru for clarity on presidential succession and potential policy shifts.
• Assess the implications of heightened political instability on Peruvian sovereign debt and local market equities, particularly for sectors sensitive to regulatory changes.
• Re-evaluate existing exposure to Peruvian assets, considering the chronic governance challenges and potential for continued social unrest.