Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

PERU

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2007
Share
  • ShareShare
Show Summary Details

(Position as of February 28, 2007)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: February 15, 1961.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2006.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)Yes.
Other security restrictionsIn accordance with the relevant UN Security Council resolutions, restrictions are imposed on financial transactions and accounts belonging to individuals and organizations associated with terrorism.
References to legal instruments and hyperlinksLegislative Decree No. 668; Organic Law of the Central Reserve Bank of Peru.
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 excessive fluctuations in the exchange rate. In certain 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 marketYes.
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 (CDRs). The use of this instrument has been limited to cases of unusual volatility in the spot exchange rate associated with pressures arising from the sale of dollars in the futures market. The CRBP made use of this instrument in late 2005 and early 2006. As of December 31, 2006, no CDRs remained outstanding.
References to legal instruments and hyperlinksLaw No. 25295, dated July 1991; Legislative Decree No. 757, dated November 13, 1993; Charter of the CRBP; Circular No. 003-2006-BCRP; www.bcrp.gob.pe/Espanol/normas_legales/Normas_divisas.htm; www.bcrp.gob.pe.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payments arrangements
Bilateral payments arrangements
OperativeA bilateral payments arrangement exists between the CRBP and the Bank Negara Malaysia.
Regional arrangementsPayments between Peru and the other LAIA countries may be made through quarterly multilateral clearing based on the balances of bilateral reciprocal lines of credit granted by the CBs.
Clearing agreementsYes.
Administration of controlBy law, there are no restrictions on exchange transactions, including holding, using, purchasing, or selling of foreign exchange.
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.
References to legal instruments and hyperlinksPolitical Constitution of Peru; Legislative Decree No. 668, dated September 16, 1992; www.tc.gob.pe/legconperu/constitucion; www.congreso.gob.pe/ntley.
Resident Accounts
Foreign exchange accounts permittedBy law, there are no restrictions on exchange transactions, including holding, using, purchasing, or selling of foreign exchange.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
References to legal instruments and hyperlinksArticle 5 of Legislative Decree No. 668; www.congreso.gob.pe/ntley.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
References to legal instruments and hyperlinksn.a.
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 December 29, 2006, the tariff structure has three rates: zero, 12%, and 20%. Previously, there were four: zero, 4%, 12%, and 20%. A temporary surcharge of 5% applies to some agricultural and textile products with basic rates of 12% and 20%. Effective December 29, 2006, the simple average tariff rate is 8.3% (previously, 10.1%) and the weighted average rate is 5.4%. On that date, the tariffs on 2,894 items were reduced: (1) tariffs on 2,798 items (mainly inputs and capital goods) were reduced to zero from 4%; and (2) tariffs on 96 items relating to the Information Technology Agreement (ITA) and capital goods were reduced to zero from 12%.
State import monopolyNo.
References to legal instruments and hyperlinksD.S. 211-06-EF.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesNo.
Export taxesNo.
References to legal instruments and hyperlinksn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
References to legal instruments and hyperlinksn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksn.a.
Capital Transactions
Controls on capital transactionsNo.
Repatriation requirementsNo.
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.
References to legal instruments and hyperlinksn.a.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Maintenance of accounts abroadCapital income on investments abroad are subject to income tax; domestic investments are exempt.
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 the latter are subject to an additional marginal reserve requirement of 30%. The increase in the foreign liabilities of financial entities is included among liabilities subject to reserve requirements in foreign currency. Effective February 1, 2007, the CRBP remunerates that part of the reserve requirement that exceeds the obligatory minimal reserve requirement in foreign currency with interest of 3% (previously, effective December 31, 2006, the interest was increased to 2.75% and effective July 1, 2006, to 2.5% from 2.25%).
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. A limit of 10% of actual net worth applies on the short foreign exchange position of financial institutions.
Provisions specific to institutional investors
Insurance companies
Limits (max.) on securities issued by nonresidentsInvestments in instruments issued by foreign corporations, or issued in the context of foreign securitization operations, may not exceed 40% of technical liabilities.
Limits (max.) on investment portfolio held abroadInvestments by insurance companies in instruments issued by foreign corporations may not exceed 40% of technical liabilities.
Pension funds
Limits (max.) on securities issued by nonresidentsPrivate pension funds may invest up to 20% of their portfolios in foreign securities issued by governments and financial and nonfinancial institutions abroad. Effective February 1, 2007, the CRBP sets an operational limit of 13.5% (previously, the limit was 12%).
Limits (max.) on investment portfolio held abroadEffective February 1, 2007, investments by private pension funds in securities issued by foreign institutions may not exceed 13.5% (previously, the rate was 12%).
Currency-matching regulations on assets/liabilities compositionArticle 178 of the General Law on the Financial System and Insurance System and the Superintendency of Banks and Insurance establishes that companies in the financial system must ensure sufficient, but not necessarily exact, matching of the maturities of their lending and borrowing operations and their deposit-taking and investments. This applies also to exposure in foreign currencies.
References to legal instruments and hyperlinksCircular No. 004-2004-EF/90 of the CRBP; Circular No. 019-2004-EF/90 of the CRBP; Circular No. 008-2005-CBRP; Circular No. 007-2004-EF/90 of the CRBP; SBS Resolution No. 351-2005; SBS Resolution No. 1455-2003; Article 6 of SBS Resolution No. 0039-2003; General Law on the Financial System and Insurance System and the Superintendency of Banks and Insurance; www.bcrp.gob.pe/Espanol/normas_legales/Circulares/c-2004/C042004.pdf; www.bcrp.gob.pe/Espanol/normas_legales/Circulares/c-2004/c192004.pdf; www.bcrp.gob.pe/Espanol/normas_legales/Circulares/c-2005/c082005.pdf; www.sbs.gob.pe/IDXFINANCIERO/RESOLUCION/0472-2001.R.DOC; www.sbs.gob.pe/IDXFINANCIERO/RESOLUCION/0351-2005.R.DOC; www.sbs.gob.pe/IDXFINANCIERO/RESOLUCION/1455-2003.R.DOC; www.sbs.gob.pe/IDXSEGUROS/RESOLUCION/0039-2002.R.DOC; www.sbs.gob.pe/PortalSBS/normatividad/Leyes/tuo.doc; www.bcrp.gob.pe/Espanol/normas_legales/Circulares/c-2004/c072004.pdf; www.sbs.gob.pe/PortalSBS/normatividad/Leyes/LeyGeneral-diciembre2005.pdf.
Changes during 2006
Imports and import paymentsDecember 29. The tariff structure changed to three rates: zero, 12%, and 20% from four rates: zero, 4%, 12%, and 20%. A temporary surcharge of 5% applies to some agricultural and textile products with basic rates of 12% and 20%. The tariffs on 2,894 items were lowered: tariffs on 2,798 items were decreased to zero from 4%, mainly inputs and capital goods; and to zero from 12% for 96 items related to the ITA and capital goods. The simple average tariff rate decreased to 8.3% from 10.1%.
Provisions specific to the financial sector
Provisions specific to commercial banks and other credit institutionsJuly 1. The rate of remuneration of reserve requirements in foreign currency was increased to 2.5% from 2.25%.



December 31. The rate of remuneration of reserve requirements in foreign currency was increased to 2.75% from 2.5%.
Changes during 2007
Provisions specific to the financial sector
Provisions specific to commercial banks and other credit institutionsFebruary 1. The rate of remuneration of reserve requirements in foreign currency was increased to 3% from 2.75 %.
Provisions specific to institutional investorsFebruary 1. The operational limits on investment abroad by private pension funds was increased to 13.5% from 12%.

    Other Resources Citing This Publication