Peru has one of the fastest growing economies in Latin America, with annual growth rates averaging around 6% since 2002. Private investment and consumer consumption have been the main drivers of this increase, and the countrys steady economic growth is the result of pro-market policies established by former President Alberto Fujimori in the 1990s. Subsequent governments have continued these business- and investment-friendly policies. Perus government continues to encourage private and public investment in a number of infrastructure projects, ranging from telecommunications to energy, sanitation, and infrastructure. At the same time, the government has increased social spending and raised taxes on the countrys mining companies, leading to lowered poverty rates and one of the fastest-growing consumer markets in Latin America and the world.
Today, Perus economy is market-oriented and focused on lowering internal economic inequality while increasing its overseas trade. Its main trading partners are currently China, the United States, Brazil, Chile, and the European Union.
Perus financial system is safe and open to obtaining or selling foreign exchange. There are currently no restrictions on sending money into or out of the country, or on making domestic or international money transfers. The countrys constitution, under Article 64, guarantees the freedom to purchase, sell, or hold foreign currency, and there are no restrictions on dividends, royalties, or remittances of profits or salaries earned for both domestic and foreign investors. Foreign investors, however, are encouraged to register their investments with Perus ProInversion registry to ensure these guarantees. Citizens and non-citizens are able to easily open a foreign currency account in any Peruvian commercial bank, and to date, no US firms have reported issues or delays in remitting capital or transferring funds into or out of the country.
Perus government is open to both foreign and domestic direct investment in nearly every sector of its economy and continues to actively seek and encourage foreign investors. In 2009, Peru signed the United States-Peru Trade Promotion Agreement to help facilitate easier trade between the countries and establish a legal framework for US investors in Peru. Since then, total trade between the two countries (imports and exports) has doubled in value, from approximately USD $9 billion to over $18 billion at the end of 2014.
Perus 1993 constitution grants all foreign investors the ability to invest in almost any sector of Perus economy, and affords them the same treatment as domestic investors receive. Foreign investors are permitted to benefit from investment incentives such as tax exemptions and are protected under several laws established by the Peruvian government to specifically handle issues related to foreign direct investment, including the Foreign Investment Promotion Law and the Framework Law for Private Investment Growth.
The Central Reserve Bank of Peru (BCR) is an independent institution responsible for setting the countrys fiscal and monetary policies, as well as overseeing adherence to domestic and international financing regulations. The bank also monitors the operation of all cash and electronic payments into and out of the country, and the performance of the countrys official currency, the nuevo sol (SOL), in foreign exchange markets. It does this by intervening in the currency markets when necessary, purchasing or selling in the open market to help steady the nuevo sols performance. The banks main goal is to maintain the nuevo sols price stability, using inflation targeting as its primary monetary tool.
The nuevo sol has been the official currency of Peru since 1985, when it replaced the original sol, which had been used as Perus official currency throughout the 19th and 20th centuries. The name is derived from both the Latin word solidus and the Spanish word solar. Since the early 2000s, the nuevo sol (plural: soles) has seen less volatility and fluctuations in international currency markets than other Latin American currencies, and has typically traded in a range of 1 3.50 sol = 1 US dollar.
The nuevo sol is based on a system of hundredths and is divided into subunits called centimos. 1 centimo is worth 1/100 of a sol. Nuevo soles coins in circulation today include the 1, 5, 10, 20, and 50 centimos coins, and the 1, 2, and 5 nuevos soles coins. Banknotes include the 10, 20, 50, 100, and 200 nuevos soles bills.
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