June 5, 2018 / 1:00 AM / a year ago

Peru's finance minister Tuesta resigns -sources

FILE PHOTO: Peru's Finance Minister David Tuesta addresses the Economic and Financial Compliance Forum of Thomson Reuters in Lima, Peru, April 26, 2018. REUTERS/Guadalupe Pardo

LIMA (Reuters) - Peruvian Finance Minister David Tuesta has resigned his post managing one of Latin America’s most stable economies after just two months into the job, a government source and a source close to President Martin Vizcarra told Reuters late on Monday.

Tuesta’s resignation marks the first major setback for Vizcarra’s government since he took office in late March when his predecessor abruptly stepped down in a graft scandal.

Both sources spoke on condition of anonymity ahead of an official announcement that the government source said would be made at some point later on Monday.

The resignation follows scattered protests in southern Peru against Tuesta’s move to hike excise tax rates on diesel and other fuels just as global crude prices were climbing - prompting Vizcarra to announce last week that the government would reconsider the measure even as Tuesta vowed to maintain it.

A bigger protest was scheduled for Tuesday, but was called off after the representatives of truck and bus drivers struck a deal with Vizcarra’s government, said the National Council of Ground Transportation, which had organised the protest.

As part of the deal, the government agreed to return 0.80 sol ($0.24) for every gallon of diesel sold to authorized drivers, the group said in a statement about the meeting.

Vizcarra, the country’s former vice president, is widely expected to keep Peru’s free-market economic model in place through 2021, when his term ends. He is constitutionally barred from seeking reelection.

Tuesta was director for Latin America’s CAF development bank before being appointed finance minister in early April.

Reporting by Marco Aquino, writing by Mitra Taj; editing by Sandra Maler, G Crosse

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