Peru’s legislature has voted to remove the country’s president, plunging the Andean nation into fresh political uncertainty and raising concerns among investors over stability, governance and economic direction.
Lawmakers in the Congress of Peru approved the motion following hours of heated debate in Lima, accusing President Pedro Castillo of constitutional violations and inability to govern. The decision immediately triggered street protests, emergency cabinet meetings and renewed scrutiny of Peru’s fragile institutional framework.
A crisis years in the making
The vote caps a prolonged period of confrontation between the executive and legislature, marked by repeated impeachment attempts, cabinet reshuffles and stalled reforms. Castillo, a former rural schoolteacher who rose to power on a populist platform, had struggled to build durable alliances in Congress while facing multiple investigations and allegations of misconduct.
Supporters of the ousted president denounced the move as a parliamentary power grab, while opposition lawmakers said they acted to defend democratic order. Security forces were deployed around key government buildings in Lima as crowds gathered both for and against the decision.
Markets brace for fallout
The political shock reverberated quickly through financial markets. Peru’s currency came under pressure in early trading, while local equities saw heightened volatility as investors assessed the risk of prolonged instability. International funds, already cautious on emerging markets, are now weighing whether the leadership change could delay infrastructure projects, mining investments and fiscal planning.
Peru is one of the world’s leading producers of copper and silver, making political continuity a key factor for global commodities supply chains. Analysts warned that any disruption to mining policy or licensing could have ripple effects well beyond Latin America.
Succession and uncertainty
Under Peru’s constitution, the vice president is expected to assume the presidency, but questions remain over the durability of the incoming administration and its ability to work with a deeply fragmented Congress. Previous transitions in recent years have been short-lived, underscoring the country’s chronic governance challenges.
Diplomatic missions in Lima called for calm and respect for constitutional processes, while regional leaders urged dialogue to prevent further escalation. Human rights groups also expressed concern over the use of force against demonstrators and stressed the need to protect civil liberties during the transition.
A broader regional signal
The latest upheaval adds Peru to a growing list of Latin American countries grappling with political polarisation and institutional strain. For investors, it reinforces the importance of political risk alongside traditional economic indicators, particularly in resource-rich economies where leadership changes can quickly alter regulatory landscapes.
Economists note that Peru still retains solid macro fundamentals, including relatively low public debt and a resilient export base. However, they caution that repeated leadership crises erode confidence and can deter long-term capital unless accompanied by credible efforts to restore stability.
What comes next
Attention now turns to the formation of a new government, potential early elections, and whether Congress can provide a workable mandate for reform. For ordinary Peruvians, the immediate concern is restoring order and economic normality. For markets, the key question is whether this latest reset will finally bring political coherence — or simply mark another chapter in a cycle of instability.
Newshub Editorial in South America – 18 February 2026
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