President Alberto Fujimori of Peru has sacked his economy minister, replacing him with the newly-appointed prime minister, Victor Joy Way, who will occupy both posts.

The move forms part of a big cabinet reshuffle involving ten ministers.

A correspondent for the BBC in Lima says the changes seem designed to improve Mr Fujimori's popularity, currently at an all-time low amid growing economic problems.

The President, who could make a bid for re-election next year, insisted that his new team would continue to follow tight fiscal policies.