On Sunday, Peru voted in a polarizing second-round presidential run-off where both candidates were unpalatable to large portions of the population (for details, see last week’s situation report).

Pedro Castillo currently holds a narrow lead over Keiko Fujimori, 50.255% to 49.745%, with nearly 97% of the vote counted.

It looks as though the Left will emerge victorious in Peru’s clash of political extremes, and markets have already reacted to the new political reality.

Analysis

With a Castillo win nearly sealed, two questions remain. The first is: Will Keiko Fujimori go quietly into the night and concede defeat? There are several indications that this won’t be the case. For one, the Popular Force candidate has already alluded to “irregularities” in strong terms, declaring that “there’s a clear intention to boycott the will of the people” in a press conference where she also called on her supporters to post their own allegations of improprieties on social media. (An UNIORE inter-American observer mission did not report any irregularities observed in the voting and counting process). Two, there is an existential aspect to Fujimori’s attempt to challenge the result, as she is otherwise facing up to 30 years in prison on corruption charges. Now with three second-round presidential defeats on her resume, this may be Fujimori’s last chance at securing power. And finally, the bitter divisiveness of the campaign and razor-thin margin of victory both lend themselves to potential challenges by Fujimori, whether in the courts or on the streets.