New Peru PM says changing the constitution could take four years

By Marcelo Rochabrun and Marco Aquino

LIMA (Reuters) -Peru's new Prime Minister Hector Valer said on Tuesday that he supports amending the country's market-friendly constitution, a campaign promise from President Pedro Castillo, but that the process would take about four years.

"From the executive's side we've been fulfilling what the president promised during the campaign," Valer told reporters, "which is to create a constitution-making moment for a new constitution."

Valer was elected as a conservative lawmaker in July before switching sides to a bloc that promotes constitutional change earlier this year. He said the process would take four years "at least" in order to convene political forces from all sides.

Castillo is set to leave office in 2026. His new Cabinet still needs to be confirmed by Congress.

Valer replaces Mirtha Vasquez, a moderate left politician who resigned https://www.reuters.com/world/americas/peru-president-castillo-replace-cabinet-moderate-pm-2022-01-31 due to disagreements with Castillo on Monday.

Castillo also named Oscar Graham, an economist with extensive experience in the public sector, to the key finance ministry.

Valer will be Castillo's third prime minister in just six months in office. His remarks show that Castillo, a member of a Marxist-Leninist party, will move more actively to push an initiative to rewrite the constitution, a campaign promise he had been so far reluctant to act on.

Investors have been weary of constitutional change, but redrafting the constitution it has long been a goal of the Peruvian left.

Castillo has said he wants to redraft the Constitution to prioritize public investments in health and education, as well as to ensure multionationals pay higher taxes. But Valer has said little in the way of what changes he would like to make.

Still, Graham may provide some stability to volatile Peruvian markets.

Graham worked at Peru's finance ministry between 2011 and 2016 and for over a decade at the central bank. He also served as vice minister in charge of small businesses during a center-right administration in 2019.

Castillo's first two Cabinets had different political leanings.

When he was sworn in in July, Castillo named a far-left Cabinet that sent the country's sol currency to record lows amid investor concerns.

But in October he named Vasquez, a moderate prime minister, who helped him fend off an impeachment attempt and win back some confidence from weary investors.

Peru's currency has strengthened so far this year, but on Tuesday it fell 1%, its worst performance since late July in the early days of the Castillo administration.

Castillo also named Alessandra Herrera as minister of energy and mines. Herrera previously worked at the ministry as head of the division that encourages the formalization of small-scale miners.

The post is critical as Peru is the world's No. 2 copper producer.

(Reporting by Marcelo Rochabrun; editing by Richard Pullin and Sandra Maler)