Annual Report on Exchange Arrangements and Exchange Restrictions 2005
Chapter

PERU

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2005
Share
  • ShareShare
Show Summary Details

(Position as of March 31, 2005)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: February 15, 1961.
Exchange Arrangement
CurrencyThe currency of Peru is the Peruvian nuevo sol.
Exchange rate structureUnitary.
Classification
Managed floating with no predetermined path for the exchange rateThe exchange rate of the nuevo sol is determined by supply and demand in the foreign exchange market. However, the Central Reserve Bank of Peru (CRBP) may intervene in the foreign exchange market at its discretion to moderate sudden fluctuations in the exchange rate. In extraordinary circumstances, intervention may be effected through bonds indexed to the exchange rate. Exchange rates of currencies other than the dollar are determined on the basis of their cross-rates with the dollar.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange market
Official cover of forward operationsThe CRBP has issued bonds indexed to the exchange rate and denominated in local currency as an instrument to cover forward sales of dollars. The use of this instrument is very rare and limited to cases of unusual volatility in the spot exchange rate associated with pressures arising from the sale of dollars in the futures market. These bonds were issued only during August to October 2002, and their balance as of the end of 2004 was zero.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payments arrangements
Bilateral payments arrangements
OperativeA bilateral payment arrangement exists between the CRBP and the Bank Negara Malaysia. However, no transactions have been conducted under the arrangement since 1998.
Regional arrangementsPayments between Peru and the other LAIA countries may be made through accounts maintained with each other by the CRBP and the other central banks concerned within the framework of the multilateral clearing system of the LAIA.
Clearing agreementsYes.
Administration of controlBy law, there are no restrictions on exchange transactions, including holding, using, purchasing, or selling of foreign exchange.
International security restrictionsNo.
Payments arrears
OfficialSmall amounts of outstanding arrears are owed primarily for unguaranteed suppliers’ credits, most of which are under negotiation with the government of Peru.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesNo.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measures
Negative listImports may be prohibited for social, health, or security reasons.
Import taxes and/or tariffsEffective February 26, 2004, the basic tariff rates are zero, 4%, 7%, 12%, and 20% with a weighted average of 10%. A temporary surcharge of 5% applies to some agricultural, agribusiness, and textile products. Inputs and intermediate goods imported under the Temporary Admission Regime are exempt from import taxes.
A reference pricing system is in effect to protect local producers of corn, milk products, rice, and sugar. Effective December 7, 2004, the tariff rate on cigarettes was reduced to 12% from 20%, and the 5% import surcharge was lifted. Effective December 23, 2004, the application of a temporary 5% surcharge on certain capital goods is extended to December 31, 2005.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesNo.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsNo.
Controls on capital and money market instrumentsNo.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investmentNo.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsNo.
Controls on personal capital transactionsNo.
Provisions specific to commercial banks and other credit institutions
Lending to nonresidents (financial or commercial credits)Lending by resident financial institutions to nonresident financial institutions, individuals, or enterprises is subject to the same prudential limits that apply to lending to residents.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsAs a measure of monetary control, there is a difference between the treatment of deposit accounts in domestic currency and deposit accounts in foreign currency, but there is no discrimination between residents and nonresidents. Liabilities in domestic and foreign currencies are subject to a minimum reserve requirement of 6% and, effective November 1, 2004, the latter are subject to an additional reserve requirement of 30% (previously, 20%). The CRBP remunerates that part of the reserve requirement that exceeds the obligatory minimal reserve requirement in foreign currency with the three-month LIBOR rate minus an amount. Effective February 1, 2005, the amount of the deduction is 0.75% (previously, 0.25%). Previously, on October 1, 2004, the amount of deduction was increased to 0.25% from 0.125%.
Liquid asset requirementsAs a prudential measure, a liquid asset requirement as a percentage of short-term liabilities (20% in foreign currency and 8% in domestic currency) is applied.
Open foreign exchange position limits
On resident assets and liabilitiesA prudential limit of 100% of actual net worth applies on the long foreign exchange position of financial institutions. Effective March 2, 2005, a limit of 10% (previously, 5%) of actual net worth applies on the short foreign exchange position of financial institutions.
Provisions specific to institutional investorsThe securities market in Peru is open to foreign investors. No legal restrictions exist on the purchase or sale of domestic securities by nonresidents or on the purchase or sale of foreign securities by residents. Revenues may be repatriated without restrictions.
Limits (max.) on securities issued by nonresidentsPension funds may invest up to 20% of their portfolio in foreign securities issued by governments and financial and nonfinancial institutions abroad. Effective April 30, 2004, the CRBP sets an operational limit of 10.5% (previously, 9%).
Limits (max.) on investment portfolio held abroadYes.
Other controls imposed by securities lawsNo.
Changes During 2004
Imports and import paymentsFebruary 26. The basic tariff rates were changed to zero, 4%, 7%, 12%, and 20%, with a weighted average of 10%.
December 7. The tariff rate on cigarettes was reduced to 12% from 20%, and the 5% import surcharge was lifted.
December 23. The application of a temporary 5% surcharge on certain capital goods was extended to December 31, 2005.
Capital transactions
Provisions specific to commercial banks and other credit institutionsOctober 1. The remuneration on excess bank reserves was reduced to 3-month LIBOR minus 0.25% from 3-month LIBOR minus 0.125%.
November 1. The additional reserve requirement on foreign currency liabilities of commercial banks was raised to 30% from 20%.
Provisions specific to institutional investorsApril 30. The operational limit set by the CRBP on pension funds’ investments in securities issued by governments, and financial and nonfinancial institutions was increased to 10.5% from 9%.
Changes During 2005
Capital transactions
Provisions specific to commercial banks and other credit institutionsFebruary 1. The remuneration of excess bank reserves in foreign currency was reduced to 3-month LIBOR minus 0.75% from 3-month LIBOR minus 0.25%.
March 2. The limit on the short foreign exchange positions of financial institutions was increased to 10% from 5% of actual net worth.

    Other Resources Citing This Publication