Using this method, the Peruvian sol is 6 percent undervalued not 44 percent.

With exports outperforming our expectations and investor sentiment turning increasingly positive, we expect the Peruvian sol to trade higher in the coming quarters, although it will average lower on the year.

The region's currencies have been losing ground against the dollar for months, with the Brazilian real weakening 15.2% last year and the Peruvian sol weakening 9.7% partly because of investor concern about the looming end to the US Federal Reserve's $85-billion-a-month bond-buying programme.

"Each new Peruvian Sol, the currency we use today, equates to one billion old Soles.