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Peruvian President-elect Ollanta Humala smiles as he arrives at a meeting with the Andean Development Corporation (CAF) President Enrique Garcia (unseen) in Caracas, July 15, 2011.Carlos Garcia Rawlins/Reuters



Peru's sol currency reached its highest levels in three years on Monday, after Ollanta Humala, the president-elect, said Julio Velarde will stay on as central bank governor during his administration.

Mr. Humala confirmed the decision to retain the well-respected economist on Sunday night, after polls showed the president-elect's approval rating plunging from 70 to 41 per cent.

"I have already spoken to Julio Velarde about staying as president of the bank. He has accepted," Mr. Humala told the Peruvian current affairs show Cuarto Poder.

Mr. Velarde has attracted praise for his handling of the fast-growing economy throughout the global economic downturn.

The president-elect promised he would announce some members of his cabinet on Wednesday.

He refused to be drawn on rumours that Luis Miguel Castilla, who resigned over the weekend as vice-minister of finance in the current administration, would become finance minister, saying only that "everything is possible."

Kurt Burneo, a former finance vice-minister, has been a key contender for the post of finance minister.

Separately, former president Alejandro Toledo, who has lent Mr. Humala technical expertise since the elections, tweeted that he would define his party's assistance in the new government's executive on Wednesday.

Mr. Humala's Gana Peru party does not have a majority in the new Congress and will need the support of Mr. Toledo's Peru Posible party.

The president-elect also acknowledged that his younger brother Alexis's trip to Russia to negotiate gas, fisheries and arms deals with high-ranking officials had been "a grave error."

The younger Humala's Moscow jaunt triggered a steep drop in the president-elect's approval ratings.

"It hit me like a bucket of cold water when I found out about [the trip]at the airport. It was not authorized. It was a blunder. I asked for a written report on the issue and they are going to have to take responsibility for their actions."

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