LIMA, Aug 21 (Reuters) - Peru's central bank said Friday that it was tightening reserve requirements on currency derivatives in its latest bid to soften the sol's slide against the dollar after it ended at its weakest level in nine years.
The central bank said that it was lowering the limit on currency derivative operations to $250 million per week from $350 million starting Monday. A new monthly limit of $1 billion per month, from the current $1.2 billion per month, would apply as of Sept. 1.
The central bank will double a currency reserve requirement on any operations that surpassed those limits, it said.
The new measures aim to reduce volatility rooted in short-term speculation by foreign investors, the central bank said in a statement late on Friday.
Earlier in the day the central bank sold $270 million in the local spot market to boost the sol . Even so the currency extended its recent losses against the dollar to end at its worst level since 2006.
Emerging market currencies such as Peru's have sunk amid worries over economic growth in China and rising expectations for an interest rate hike in the United States.
(Reporting By Mitra Taj; Editing by Ken Wills)