Cases / Latin America's debt crisis / Peru
The inti was created in 1985 to replace a sol already worn down by inflation.
Currency reform: 1 nuevo sol = 1,000,000 intis · Cause: Price controls, a deficit paid by the central bank · Resolution: The "Fujishock" (Aug 1990), then the nuevo sol (1991)
Under price controls, a debt-service cap and deficits financed by the central bank, it went into hyperinflation twice: 114 % in September 1988, then 397 % in August 1990 — the month of the stabilisation shock itself — with prices doubling every 13.1 days (H&K). In 1991 one nuevo sol replaced a million intis.
Intis per 1 USD, logarithmic scale: each line up is many times the one below.
Two hyperinflation episodes: September 1988 (114%) and July–August 1990, peak 397% in August 1990 (Hanke & Krus). The nuevo sol replaced 1,000,000 intis on 1 July 1991. Approximate series, kept for its shape; individual points are not sourced one by one. Source: Banco Central de Reserva del Perú.
The events in order, with the banknotes at the date on them.
The Fujishock was the textbook "pain first" exit: freed prices, a balanced cash budget (spend only what was collected), a floating exchange rate and a return to creditors. The nuevo sol has been one of Latin America's steadiest currencies since.
| figure | value | source |
|---|---|---|
| Hyperinflation episodes | Sep 1988 · Jul – Aug 1990 | H&K |
| Peak month | August 1990 | H&K |
| Peak monthly inflation | 397 % | H&K |
| Doubling time at peak | 13.1 days | H&K |
| First spike | 114 % (Sep 1988) | H&K |
| Inti introduced | 1 Feb 1985, 1 inti = 1,000 soles de oro | Wikipedia (Peruvian inti) |
| Largest note | 5,000,000 intis (1990; overprinted variant Jan 1991) | Wikipedia (Peruvian inti) |
| Nuevo sol | 1 Jul 1991, 1 sol = 1,000,000 intis | Wikipedia (Peruvian inti) |
| Month | per $ |
|---|---|
| 1988-01 | 33 |
| 1988-06 | 250 |
| 1988-09 | 900 |
| 1988-12 | 2,000 |
| 1989-03 | 5,500 |
| 1989-06 | 15,000 |
| 1989-09 | 35,000 |
| 1989-12 | 75,000 |
| 1990-03 | 145,000 |
| 1990-06 | 250,000 |
| 1990-07 | 350,000 |
| 1990-08 | 500,000 |
H&K = Hanke, S. H. & Krus, N. (2012), World Hyperinflations, Cato Institute Working Paper no. 8.