This handout picture released by the Peruvian presidency shows Peru's new Prime Minister Guido Bellido (right) swearing before Peruvian President Pedro Castillo during the symbolic presidential investiture ceremony at Pampa de la Quinua in Ayacucho, southern Peru, on July 29, 2021. (ERNESTO ARIAS / PERUVIAN PRESIDENCY / AFP)

Peru’s President Pedro Castillo named a far-left party member as his prime minister, bolstering the influence of the radical wing in his administration, while investors await a key decision on who will run the finance ministry.

Investors are eagerly awaiting for the announcement of the full cabinet, and particularly the finance minister, to gauge how radical President Pedro Castillo’s administration will be. He promised to rewrite the constitution in order to make “responsible changes” to the nation’s economic model

Guido Bellido, a recently-elected lawmaker who considers the communist government of Cuba a democracy, is going to preside the council of ministers that Castillo is expected to swear in later on Thursday. He has never held public office and is close to Vladimir Cerron, the founder of the president’s Free Peru party.

Investors are eagerly awaiting for the announcement of the full cabinet, and particularly the finance minister, to gauge how radical Castillo’s administration will be. The former rural teacher took office on Wednesday, promising to rewrite the constitution in order to make “responsible changes” to the nation’s economic model.

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The yield on Peru’s benchmark dollar bonds has risen for eight straight days to 2.68 percent, the highest in six weeks. While local markets were shut for a holiday, the American Depositary receipts of Peruvian bank Credicorp Ltd reversed gains and fell 1.7 percent for the day after the prime minister appointment.

In recent months, Castillo has reached out to other leftist parties such as Together for Peru, and appointed mainstream economists as advisers. Naming Bellido is a signal that he is beholden to socialists in his own party, which may make it harder to forge the alliances to pass legislation in congress where he doesn’t have a majority.

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“Having a prime minister from Peru Libre may not be a sign of an open government that wants to promote governability,” said Alexandra Ames, who teaches at the School of Public Management of the University of the Pacific in Lima.