Peru, officially the Republic of Peru, is a country in western South America. It is bordered in the north by Ecuador and Colombia, in the east by Brazil, in the southeast by Bolivia, in the south by Chile, and in the west by the Pacific Ocean. Peru is an extremely bio diverse country with habitats ranging from the arid plains of the Pacific coastal region in the west to the peaks of the Andes mountains vertically extending from the north to the southeast of the country to the tropical Amazon Basin rain forest in the east with the Amazon river.
The Peruvian banking sector's fundamentals have improved dramatically over the past decade and remain firm, despite a slowdown in economic activity in 2013. Overall credit growth, which had been trending downwards, stabilized in the fourth quarter of 2013 and the quality of the lending portfolios of the Banco Central de la República Del Peru (BCRP, the Central Bank) remains robust. The overall non-performing loan (NPL) ratio was 2.1% in December, a level at which it has stabilized, after rising from a low of around 1.5% at end-2011/early 2012. Profitability has remained strong and relatively stable: banks' weighted average return on assets (ROA) in December was 2%, while return on equity (ROE) stood at 21.2%. This has coincided with a reduction in the dollarization of Peru's financial system (which has traditionally been very high), providing some shelter to borrowers from the impact of exchange-rate fluctuations.
|Agriculture||Grapes, avocados, mangoes, peppers, sugarcane, organic coffee and premium-quality cotton.|
|Manufacture||Textiles, metal, chemicals, pharmaceuticals, machinery, copper, silver, gold & natural gas.|
|Services (Including financial)||56.3% (2013 estimate)|
|Maple Energy||Oil & gas|
|Luz Del Sur||Utility|
The Bolsa de Valores de Lima (BVL) is the stock exchange of Peru, situated in the capital Lima. It has several indices. The IGBVL (Indice General Bolsa de Valores) is a value-weighted index that tracks the performance of the largest and most actively traded stocks on the Lima Exchange. The major securities exchange market in Peru, the Lima Stock Exchange (in Spanish, the Bolsa de Valores de Lima) began operations in 1861 but did not trade in any type of stocks for the first 30 years. The Exchange was re-launched in 1898. Business is conducted both on a trading floor and through an electronic system that was established in 1995. The functions of the Lima Stock Exchange include informing members on purchases and sales, impartially executing trade instructions, registering securities, promoting securities trading, keeping the general public informed about stock values, investigating potential new products, and more. Its value-weighted IGBVL index, the general index of the Lima Stock Exchange, tracks the Exchange's largest and most actively traded stocks. In Peru, non-residents can open brokerage accounts in the same manner as residents would and brokerage accounts can even be opened through email. No local bank account is required. There are about twenty brokerage firms in Peru (Sociedades Agente de Bolsa) including those belonging to the major banks and for the most part there are no minimum investments required. All brokerage transactions are supervised by the Peruvian Securities Commission and the average commission works out to about one to two percent of the total trade value (minimum commissions may apply).
Hyperinflation 1988 – 1990
The Garcia government reacted to the growing external deficit in exactly the same way as had the governments of Velasco and of Belaúnde—by postponing corrective action while the problem continued to worsen. As ever, a major fear was that devaluation would worsen inflation. Inflationary pressures were, in fact, beginning to worsen behind the façade of control. To some degree, they were growing in response to the high rate of growth of demand and output, reducing margins of previously underutilized productive capacity. But the more explosive pressures were being built up by relying on price controls that required a dramatic expansion of credit to keep the system in place. Prices of public sector services—gasoline above all, oil products in general, electricity, telephones, and postal services—were frozen at levels that soon became almost ridiculous in real terms. The restrictions on prices charged by state firms drove them ever deeper into deficits that had to be financed by borrowing. The borrowing came from wherever it could, but principally from the Central Bank. At the same time, Central Bank credit rose steadily to keep financing agricultural expansion. Still another direction of Central Bank credit creation was the financing used to handle the government new structure of multiple exchange rates. Differential rates were used to hold down the cost of foreign exchange for most imports, again with the dominant goal of holding down inflation, while higher prices of foreign exchange were paid to exporters to protect their incentives to export. The Central Bank thus paid more for the foreign exchange it bought than it received for the exchange it sold.
The term used for these leakages;for extensions of Central Bank credit that did not count in the government budget deficit;is the "quasi-fiscal deficit." Its total increased from about 2 percent of GDP in 1985 to about 4 percent in 1987. Meanwhile, the governments tax revenue fell steadily in real terms, partly because of tax reductions implemented to hold down business costs and partly because of the effect of inflation in cutting down the real value of tax payments. Added together, the fiscal deficit plus the quasi-fiscal deficit increased from 5 percent of GDP in 1985 to 11 percent by 1987. The two horsemen of this particular apocalypse;the external deficit and the swift rise of Central Bank credit&;would have made 1988 a bad year no matter what else happened. But President Garcia guaranteed financial disaster by his totally unexpected decision in July 1987 to nationalize the banks not already under government ownership. No one has yet been able to explain why he decided to do so. It would not seem to have been a move necessary for any component of his program, or needed for government control in a banking sector in which it already had a dominant position. In any case, the action underlined the unilateral character of economic policy action under Peru presidential system and wrecked any possibilities of further cooperation with private sector leadership. Private investment began to fall, and the whole economy followed it down shortly thereafter.
The Garcia government tried a series of major and minor new policy packages from early 1988 into 1990 to no avail. The new policies never succeeded in shutting off the rapid infusion of Central Bank credit that was feeding inflation, even when they did succeed in driving production down significantly in 1989. Manufacturing production fell 18 percent in that year, agricultural output 3 percent, and total GDP 11 percent. Simultaneously, inflation increased from a record 666 percent in 1988 to a new record of 3,399 percent for 1989. The one positive change was the external current-account deficit: the fall in domestic production and income was so steep that the current account went from a deep deficit to a substantial surplus. The internal cost was perhaps clearest in terms of real wages: the minimum wage in real terms for urban labor fell 61 percent between 1987 and 1989, and average real wages in manufacturing fell 59 percent.
Critics of Garcia presidency claim that his many poor decisions while in office created an environment that led to the rise of an authoritarian leader like Alberto Fujimori, who came to power in 1990. Fujimori implemented drastic measures that caused inflation to drop from 7,650% in 1990 to 139% in 1991. Faced with opposition to his reform efforts, Fujimori dissolved Congress in the auto-golpe of April 5, 1992. He then revised the constitution; called for new congressional elections, and undertook a process of economic liberalization which put an end to price controls, discarded protectionism, eliminated restrictions on foreign direct investment and privatized most state companies. The reforms allowed sustained economic growth, except for a slump after the 1997 Asian financial crisis.
Peruvian territory was home to ancient cultures spanning from the Norte Chico civilization in Caral, one of the oldest in the world, to the Inca Empire, the largest state in Pre-Columbian America. The Spanish Empire conquered the region in the 16th century and established a Viceroyalty with its capital in Lima, which included most of its South American colonies. Ideas of political autonomy later spread throughout Spanish America and Peru gained its independence, which was formally proclaimed in 1821. After the battle of Ayacucho, three years after proclamation, Peru ensured its independence.
After achieving independence, the country remained in recession and kept a low military profile until an economic rise based on the extraction of raw and maritime materials struck the country, which ended shortly before the war of the Pacific. Subsequently, the country has undergone changes in government from oligarchic to democratic systems. Peru has gone through periods of political unrest and internal conflict as well as periods of stability and economic upswing. Peru is a representative democratic republic divided into 25 regions. It is a developing country with a high Human Development Index score and a poverty level around 25.8 percent. Its main economic activities include mining, manufacturing, agriculture and fishing. The Peruvian population, estimated at 31.2 million in 2015, is multiethnic, including Amerindians, Europeans, Africans and Asians. The main spoken language is Spanish, although a significant number of Peruvians speak Quechua or other native languages. This mixture of cultural traditions has resulted in a wide diversity of expressions in fields such as art, cuisine, literature, and music.
In the early 19th century, while most of South America was swept by wars of independence, Peru remained a royalist stronghold. As the elite vacillated between emancipation and loyalty to the Spanish Monarchy, independence was achieved only after the occupation by military campaigns of José de San Martín and Simon Bolívar. The economic crises, the loss of power of Spain in Europe, the war of independence in North America and native uprisings all contributed to a favorable climate to the development of emancipating ideas among the criollo population in South America. However, the criollo oligarchy in Peru enjoyed privileges and remained loyal to the Spanish Crown. The liberation movement started in Argentina where autonomous juntas were created because of the loss of authority of the Spanish government over its colonies.
Mario Vargas Llosa
Andres Avelino Caceres
The Sol is the currency of Peru. The Sol is subdivided into 100 cents, called centimes in Spanish. The ISO 4217 currency code is PEN. The Sol replaced the Peruvian inti in 1991 and the name is a return to that of Peru's historic currency, as the Sol was in use from the 19th century to 1985. Although the derivation of Sol is the Latin solidus, the word also happens to mean sun in Spanish. There is a continuity therefore with the old Peruvian inti, which was named after Inti, the Sun God of the Incas. Until recently, the currency was called “Nuevo Sol”. On November 13, 2015, Peru's Congress voted to revert the name of the currency to simply “Sol”. The renaming of the currency went into effect on December 15, 2015. Because of the bad state of economy and hyperinflation in the late 1980s the government was forced to abandon the inti and introduce the Nuevo sol as the country's new currency. The currency was put into use on July 1, 1991 (by Law No. 25,295) to replace the inti at a rate of 1 Nuevo sol to 1,000,000 intis. Coins denominated in the new unit were introduced on October 1, 1991 and the first banknotes on November 13, 1991. Hitherto the Nuevo Sol currently retains a low inflation rate of 1.5%, the lowest inflation rate ever in both Latin and South America. Since the new currency was put into effect, it has managed to maintain a stable exchange rate between 2.2 and 3.66 per United States dollar.
Peruvian Nuevo Sol is one of the crucial steady and reliable currencies and also being the currency that is least affected by the weak greenback world tendency at that time. In 1980s, there was a dangerous state of economy and hyperinflation in the federal government and was therefore pressured to desert the inti that was introduced Nuevo Sol being the country’s new banknote. Cash denominated within the appended unit have been brought in on October 1, 1991 adding the primary currency on November 13, 1991. Since the brand-new foreign money was implementing, it has staggered to maintain up a secure alternate rate from 2.3 to 3.65 Nuevo Soles per Dollar. Peru is a developing economy that is market-oriented, characterized by an increasing degree of overseas trade but also an excessive degree of inequality. The financial system of Peru is the forty-second largest in the world. Its economic system is diverse even though the merchandise exports is needed, the commerce and business are located in Lima however the agricultural exports was able to create progress in all of the regions.
The current coins were introduced in 1991 in denominations of 1, 5, 10, 20, and 50 cents and 1 Sol. The 2 and 5 Sol coins were added in 1994. Although 1 and 5 cent coins are officially in circulation, they are very rarely used. For this reason, the 1-cent coin was removed from circulation as of May 1, 2011. For cash transactions, retailers must round down to the nearest zero, or up to the nearest 5 cents. Electronic transactions will still be processed in the exact amount. An aluminum one-cent coin was introduced in December 2005. And a five-cent coin in 2007. All coins show the coat of arms of Peru surrounded by the text Banco Central de Reserva Del Peru (Central Reserve Bank of Peru) on the obverse. The reverse of all coins shows the denomination. Included in the design of the bi-metallic 2 and 5 Sol coins are the hummingbird and condor figures from the Nazca Lines. In 1990, banknotes for 10, 20, 50 and 100 Soles were introduced. The banknote for 200 Soles was subsequently introduced in August 1995. All notes are of the same size (140 x 65 mm) and contain the portrait of a well-known historic Peruvian on the obverse.
|National Song||"Himno Nacional del Perú"|
|Currency||Peruvian sol (PEN)|
|GDP / GDP Rank||406.206 Billion USD|
|GDP Growth Rate||3.3 Percent|
|GDP Per Captial||$12903.089 (PPP)|
< 1.0% Muslims
< 1.0% Hindus
< 1.0% Buddhists
< 1.0% Jews
< 1.0% Other Religions
Mestizo (Mixed Amerindian And White) 37%
President – Martín Vizcarra[α]
Prime Minister – César Villanueva
|Website||Go to the web|
|Public Debt||24.815 Percent|
|Unemployment Rate||4.946 Percent|
|Labor Force (Occupation)||-|