338) Currency of Peru: Nuevo Sol (Sun) and Centavo: (Part I): (i) About Peru (ii) History-Brief recap (ii) Creation of Spanish mints in Peru (iii) Independence of Peru (iv) Experiments with currencies, including short-lived ones (v) Establishment of the Central Bank of Peru:

338) Currency of Peru: Nuevo Sol (Sun) and Centavo: (Part I): (i) About Peru  (ii) History-Brief recap (ii) Creation of Spanish mints in Peru (iii) Independence of Peru (iv) Experiments with currencies, including short-lived ones (v) Establishment of the Central Bank of Peru:

For Part I of the Post on Peru titled “338) Currency of Peru: Nuevo Sol (Sun) and Centavo: (Part I): (i) About Peru  (ii) History-Brief recap (ii) Creation of Spanish mints in Peru (iii) Independence of Peru (iv) Experiments with currencies, including short-lived ones (v) Establishment of the Central Bank of Peru, link to which is as follows: Currency of Peru (Part I)

(For Part II of the Post on :"339) Currency of Peru: Nuevo Sol (Sun) and Centavo: (Part II): (i) Coins of the Nuevo Sol (ii) Coat of Arms of Peru (iii) Commemorative Coins: Numismatic Series on Natural Resources of Peru (iii) Commemorative Coins: Numismatic Series on “Wealth and Pride of Peru” (iv) Banknotes of the Nuevo Sol (Brief Review), please click on the following link: Please click here )

(For Part III of the Post on: " 340) Currency of Peru: Nuevo Sol (Sun) and Centavo (Part III): (i) Presently Circulating Banknotes, including descriptions of the famous Personalities and (ii) the Enigma of Ancient Heritage Cities/Cultures of Peru which feature on the Banknotes iii) The ancient communication systems of the Incas down the generations:(Please click here)

 

About Peru:

The Republic of Peru (“Republica del Peru” in Spanish) is situated in Western South America. It is bordered in the North by Ecuador and Colombia, in the East by Brazil, in the South-East by Bolivia, in the South by Chile and in the West is the Pacific Ocean.

It is a country of extreme bio-diversity, with habitats ranging from arid plains of the Pacific coastal region in the West to the peaks of the Andes Mountains, vertically extending from the North to the South-East of the country, to the tropical Amazon Basin rainforest in the East along the Amazon River.

The territories which comprise present day Peru were inhabited by several ancient cultures – from the Norte Chico civilization in Caral-Supe, one of the oldest in the World, to the Inca Empire, which was the largest State in Pre-Columbian America.

The name of the country is derived from “Biru” (In Hindi, the term Biru means “Brave warrior”), who was a local ruler in the Panama area in the early 16^th Century.

History – Brief recap:

By 1522, the Spanish explorers set up a base in Biru’s kingdom and began exploring territories/Regions farther South.

In 1532, a party of Spanish Conquistadors defeated and captured the Inca Emperor Atahualpa in the Battle of Cajamarca. The Spanish conquest of the Inca Empire was one of the most important campaigns in the Spanish colonisation of the Americas.

By the late–1530s, several campaigns later, the Spanish conquests led to a Spanish victory and colonisation of the Region. The former Inca strongholds of Bolivia, Chile and Peru were absorbed by Spain’s colonial empire.

 In the 16^th Century, a Viceroyalty of Peru was set up with its capital at Lima, which became known as “The City of Kings”. The Viceroyalty included most of Spain’s South American colonies.

Creation of the Spanish mints in Peru and Bolivia:

In 1543, silver was discovered in Bolivia at Potosi in the Cerro Rico which contained the largest silver deposit then known.

By the mid- 16^th Century, following the great production and influx of silver from Americas to Spain, the importance of minting coins in these colonies was realised by the Spanish Crown as it would facilitate economic benefits, as well as, better control of the colonies.

In April 1561, the then Viceroy of Peru, Diego Lopez de Zuniga, Count de Neiva, wrote to King Philip II, requesting authorization to establish a mint at Peru.

On 21.08.1565, the Lima Mint in Peru began striking crudely made silver coins, followed by Potosi in Bolivia (formerly Upper Peru) from 1575.  These coins were struck by the hammer and anvil method and were mainly issued as a convenient medium for shipping bullion, rather than for local distribution. These silver pieces were called “Cobs” and they had an irregular border and their shape was not perfectly circular.

Image of the earliest cobs of 8 Reales struck in Peru

From 1751, the first gold coins “Cordoncillo” were minted. These coins were nicknamed “the Peluconas” (meaning a wig or hair-piece), because on the Obverse, they had effigies on them, of the ruling Spanish King wearing a large wig, which was in fashion during the so called “Age of Enlightenment”, which led to these coins being nicknamed as such.

The above is an image of an 8 escudo gold coin showing King Charles III of Spain wearing a wig in the coin issued by Chile in 1803. Coins like this were nicknamed the "Peluconas"

Later, the mint issued coins called the “Columnarias” which included the design of two overlapping hemispheres, representing the Old and the New World, flanked by the two columns of Hercules, which symbolised the unity and strength of the Spanish empire.

 An image of a Columnario issued by the Mexican Mint in 1761. Coins like these were minted by the Lima and Potosi Mints

Earlier in Spanish coins a legend “Non Plus Ultra” was carried, which referred to the extent of the Spanish power to the ends of the Seas. With the conquest of America, the legend was changed to “Plus Ultra”, as a confirmation of the ultramarine domain of Spain who came from beyond the Straits of Gibraltar.

Independence of Bolivia (Upper Peru) and Peru from Spain:

In 1809, Bolivia (then known as Upper Peru) declared its Independence from Spain following an uprising in La Paz.

It was the first country to do so but it took 16 years before Simon Bolivar’s crushing defeat on the last Spanish army in South America at the Battle of Maipu in 1824.

The indigenous people in Peru had all along clamoured to get Independence from the Spanish yoke and Peru’s Independence was formally proclaimed in 1821.

After the decisive Battle of Ayacucho fought in 1824, in which about 6000-8500 men fought in the United Liberation Army under the commands of Antonio Jose de Sucre and Augustin Gamarra against a Spanish force of about 6900 to 9310 men, in which the Spanish Army was completely routed with more than half their fighting force either killed or taken prisoner, Peru ensured that its Independence was on firm footing.

After Independence, the country went through turmoil and underwent changes in the Government from an Oligarchic system of Government to a Democratic one.

Peru continued to experience periods of political unrest and internal conflict as well as, periods of stability and economic growth. Its main economic activities are mining, manufacturing, agriculture and fishing etc.

Present day:

Around 32 million people live in Peru, with the population being quite diverse, which includes Amerindians, Europeans, Africans and Asians. The predominant language is still Spanish, with Quencha and other indigenous languages finding favour with several Peruvians.

This Unity in Diversity brings about a mixture of cultural traditions which has given the country a wide variety of expressions in areas like art, cuisine, literature and music.

Historical development of Peruvian Currency – Coins and Banknotes:

The Peruvian Real:

During the Spanish colonial period, silver coins denominated in ¼, ½, 1, 2, 4 and 8 Reales were circulated along with gold coins in the denominations of ½, 1, 2, 4 and 8 Escudos.

In 1822, a provisional coinage issued in the name of the Republic of Peru, with the first issues being denominated in ¼ Real, ½ and ¼ Pesos (equal to 1 and 2 Reales) and 8 Reales in the name of the Republic of Peru were introduced. Except for the Silver 8 Reales, these coins were minted in Copper.

From 1826 to 1856, a regular coinage was issued which consisted of the same silver and gold denominations as had been issued during the Spanish Colonial period. The tiny silver quarter Real featured a llama, but the higher values had the standing figure of Liberty on the Reverse. The Coat of Arms was depicted on the Obverse.

During 1836 – 1839, when Peru was part of the Bolivian Confederation, the States and then Republics of North and South Peru issued their own coins. These coins were inscribed “Nor-Peruana” or “Repub. Of Sud-Peruana Confederation”.

North Peru issued ½, 1, 2, 4 and 8 Escudos while South Peru issued ½, 2, 4 and 8 Reales and ½, 1 and 8 Escudos.

In 1856, production of all coin denominations stopped.

In 1858 and 1859, smaller ½ and 1 Real coins were issued.

In 1862 and 1863 redesigned 4 and 8 Reales coins were minted.

1862 Gold 8 Escudos Obverse with the Coat of Arms of Peru and Reverse with a woman over the denomination 8E “FIRME Y FELIZ POR LA UNION REPUBLICA PERUANA LIMA EL QUILATES Y.B.”

 Gold 8 Escudos from South Peru. Obverse with Coat of Arms of the Peru-Bolivian Confederation & the inscription“REPUB. SUD. PERUANA. CUZCO ANO DE 1838”.

  Reverse with the image of Sacsayhuaman, the denomination 8E and the State motto “FIRME POR LA UNION CONFEDERACION”.

Introduction of the Sol (1858-1863):

Between 1858 and 1863, circulation coins were denominated in Reales, Centavos and Escudos.

This was a transitional phase in Peruvian coinage, before a fully decimalised system was put in place in 1863.

Until 1863, the Real was the circulating currency of Peru with 16 silver Reales being equal to one gold Escudo. Also circulating was a silver coin known as the Peso.

However, parallely, the Spanish Colonial Real continued to be minted. Later, the Spanish Colonial Real was replaced by Peruvian currency following Peru’s liberation in 1826.

Banknotes:

Auxiliary Bank of Paper Money:

Under the Protectorate Decree of General Jose de San Martin on 14.12.1821, the “Emision Bank” was created which was better known as the “Bank of Emancipation”.

It began operations on 07.02.1822 and issued Banknotes in the denominations of 2 and 4 Reales and 1 Peso.

On 04.06.1823, this Bank was closed down by a Decree of President Jose de la Riva Aguero with public burning of the Banknotes.

Private Banks:

The first private Bank established in Peru was the “Banca La Providencia” in September 1862.

Between July 1863 and 1866, Banknotes in the denominations of 5, 10, 25, 50, 100, 200 and 500 Pesos were issued.

After 1867, Banknotes for 25 and 100 Pesos could be exchanged for 20 and 80 Soles respectively.

On 23.05.1863, the “Banco del Peru” (“Bank of Peru”) was established. In August   1863, this Bank issued Banknotes in the denominations of 5, 10, 100 and 500 Pesos.

After 1867, the Bank issued Banknotes denominated in Sols.

The “London and South American Bank “(later named the “London Bank of Mexico and South America”), a British Bank founded in London in 1863, opened its first subsidiary in August 1863 in Lima.

It became the principal Bank in South America and issued Banknotes in the denominations of 5, 25, 100 and 1000 Pesos.

The Sol (1863-1985)

In 1863, the Real was replaced by the Sol at an exchange rate of 1 Sol to 10 Reales.

The term “Sol” is derived from the Latin word “Solidus” and the word Sol” is the Spanish term for “Sun”

Between 1863 and 1985, Sol has been the Currency of Peru. It is sub-divided into 10 Dinero or 100 Centavos.

In 1863, Sol became the circulating currency in Peru, after Peru decimalised it’s currency by replacing the “Real” at an exchange rate of 1 Sol for 10 Reales.

The Sol also replaced the Bolivian Peso, which was circulating in Southern Peru at an exchange rate of 1 Sol for 1.25 Bolivian Pesos.

In 1880 and 1881, silver coins denominated in Pesetas were issued, which had a value of 20 Centavos to 1 Peseta.

From 1901 to 1930, the peg to France which had all along been at an exchange rate of 1 Sol to 5 French Francs was abandoned and the Sol was linked to the British Pound (GBP) at an exchange rate of 10 Soles to 1 GBP (raised from the earlier exchange rate of 5.25 Soles to 1 GBP). Gold coins and Banknotes denominated in Libra were issued for this purpose. (Detailed commentary on the “Libra” is given later in this post).

In 1930, Peru left the gold standard and set up an official rate of 2.5 Soles to a US Dollar, which remained current till 1946.

In 1933, Banknotes were issued denominated in Soles, which were now called “Soles de Oro”.

From 1935, coins were issued also denominated in “Soles de Oro”.

In 1985, due to chronic inflation, Peru replaced the Sol, with the “Inti” at an exchange rate of 1000 Soles to 1 Inti. (Detailed commentary on the “Inti” is given later in this post).

In 1991, the “Nuevo Sol” replaced the Inti at a staggering rate of 1 million Inti to I Nuevo Sol or 1 billion old Soles to 1 Nuevo Sol. (Detailed Commentary on the Nuevo Soles is given later in this post)

Coin of the Sol:

In 1863 and 1864, 1 and 2 Centavo coins (both Cupro-Nickel) and ½ and 1 Sol coins (both .900 Silver coins) respectively were issued. Also in 1863, 5, 10 and 20 Soles coins were issued (all three denominations in Gold).

In 1875 and 1876, bronze metallic composition replaced Cupro-Nickel in the Centavo coins.

In 1879 and 1880, provisional coins were issued in denominations of 5, 10 and 20 Centavos (all three denominations in Cupro-Nickel) which replaced Banknotes denominated in Cents.

In 1898, Gold coins denominated in 1 Libra (equal to 10 Soles) were introduced, followed by ½ Libra (equal to 5 Soles) in 1902 and 1/5 Libra (equal to 2 Soles) in 1905, which remained in circulation till 1930.

In 1918, 5, 10 and 20 Centavo coins were introduced (all in Cupro-Nickel).

In 1922, ½ and 1 Sol coins were issued (both in .500 fineness silver).

In 1935, the ½ and 1 Sol coins metallic composition was changed from .500 Silver to Brass.

In 1942, 5, 10 and 20 Centavos coins were issued (all denominations in Brass).

In 1950, 1 and 2 Centavos coins were issued (both denominations in Zinc) which continued till 1958.

In 1965, 25 Centavos coins were circulated.

In 1969, 5 and 10 Soles coins (both denominations in Cupro-Nickel) were circulated.

In 1975, minting of 5 and 25 centavos coins stopped.

In 1976, minting of 10 and 20 Centavos coins was ceased.

In 1977, minting of 50 centavos coins was stopped.

In 1978, the metallic composition of 5 and 10 Soles coins was changed from Cupro-Nickel to Brass.

In 1979, 50 Soles coins (in Aluminium-Bronze) were introduced.

In 1980, 100 Soles coins (in Cupro-Nickel) were introduced.

In 1982, the last of 1 Sol coins were issued.

In 1983, the last of 5 Sol coins were issued.

In 1984, 10, 50, 100 and 500 Soles coins (all denominations in Brass) were issued which were last minted upto a year later in 1985.

Banknotes of the Sol:

The first Banknotes in Peru were introduced by private banks.

In 1864, “Banco La Providencia” introduced Banknotes in the denominations of 20, 40, 80 and 200 Soles and 5, 10, 25, 50 and 250 Pesos.

Later, the Bank included denominations of ½, 1, 2, 4, 5, 8, 10, 20, 50, 100, 500 and 1000 Soles.

In addition, 15 other Private Banks were issuing circulation Banknotes, which included additional denominations to those being issued by Banco La Providencia” of 10, 20 and 40 Centavos, and 25 and 400 Soles.

In 1879, the Government introduced Banknotes in the denominations of 1, 2, 5, 10, 20, 50, 100 and 500 Soles.

In 1881, 5 and 10 Incas Banknotes were overprinted with the denominations of 50 and 1000 Soles.

In 1914, bearer cheques were introduced for ½, 1, 5 and 10 Libras (equivalent to 5, 10, 50 and 100 Soles).

In 1917, Gold Certificates for 5 and 50 Centavos and 1 Sol were issued.

In 1918, 1 Sol Cheques were issued.

In 1922, the Reserve Bank of Peru took over the function of paper money production, issuing a final series of Libra Banknotes.

In 1933, the Reserve Bank began issuing Banknotes denominated in Soles. The first issues of Soles were Libra Banknotes overprinted with the new denominations of 5, 10, 50 and 100 Soles.

Regular issues of Soles followed soon after in the denominations of ½, 1, 2, 5, 10, 20, 50 and 100 Soles Banknotes. 50 Centavos and 1 Sol Banknotes were issued only until 1935.

In 1946, 500 Soles Banknotes were issued.

In 1968, 200 and 1,000 Soles Banknotes were circulated.

In 1974, the 5 Soles Banknotes was last printed.

In 1976, the printing of 10 Soles Banknotes was stopped.

In 1977, the printing of 50 Soles Banknotes was ceased. Also, 5,000 Soles Banknotes were introduced.

In 1979, 10,000 Soles Banknotes were circulated.

In 1981, 50,000 Soles Banknotes were issued.

Experimental/short-lived Currencies:

Peseta (1880 – 1882):

The Peseta was a short-lived denomination, introduced by Peru between 1880 and 1882. The Peseta was sub-divided into 10 Reales, with 5 Pesetas being equal to 1 Sol. The Sol continued to be issued during this period and was not replaced by the Peseta.

In 1880, Silver Peseta coins minted by the Lima Mint in the denominations of 1 and 5 Pesetas were introduced.

Again in 1881 and 1882, 5 Peseta coins made by the Ayacucho mint were circulated, which also issued a small number of ½ Real coins.

Inca (1881 – 1882):

Between 1881 and 1882, the Inca was introduced for use on Banknotes. The Inca was issued as Banknotes only and was sub-divided into 10 “Reales de Inca” or 100 “Centavos de Inca”.

The Inca was circulated in two types of Banknotes – one consisting of overprints on three denominations of earlier Banknotes (1 Real de Inca, overstamped on old 1 Sol Banknotes, 5 Reales de Inca overstamped on old 5 Soles Banknotes and 100 Centavos de Inca (i.e. 1 Inca), overstamped on old 100 Soles Banknotes) and

The other Banknotes were regular printed issues in the denominations of 1, 5 and 100 Incas were also issued.

Later, the Inca was replaced by the Peruvian Sol at an exchange rate of 1 Inca to 10 Soles.

Libra (1898 – 1931):

Between 1898 and 1931, gold coins and Banknotes denominated in Libra (“Libra” or “Libra peruana de oro” meaning “Peruvian gold pound” which were equivalent to 10 Soles and was at par with the British sovereign) were issued and circulated.

Between 1902 and 1913, a half-Libra coin was circulated.

Also between 1905 and 1930, a 1/5 Libra coin was in circulation.

Between 1914 and 1918, Cheques Circulares were issued which could be exchanged by six designated banks for the value of ½, 1, 5 and 10 Libras.

In 1922, the Reserve Bank of Peru took over the production of paper money and introduced paper money having the same denominations as the earlier “Cheques Circulares”.

In 1933, some of these Banknotes, together with unissued Banknotes dated 1926, were overstamped by the Central Reserve Bank of Peru with their vales denominated in Soles.

Inti (1985 – 1991):

In 1985, due to chronic inflation, Peru replaced the Sol, with the “Inti” at an exchange rate of 1000 Soles to 1 Inti.

Inti is also the name of the “Sun God” of the Incas.

The Inti sub-divided into 100 Centimos was the currency of Peru from 1985 to 1991.

By May 1985, coins in the denominations of 1, 5, 10, 20 and 50 Centimos denominated in the Intis were put into circulation. All denominations depicted Navy Admiral Miguel Grau.

By June 1985, Banknotes in the denomination of 10 Intis (featuring Ricardo Palma – writer), 50 Intis (Nicolas de Pierola – President, Finance Minister), 100 Intis (Ramon Castilla – President, Army Marshal), 500 Intis (Tupac Amaru II – Revolutionary leader),

In 1986, Banknotes of 1,000 Intis (depicting Andres Avellino Caceres – President, Army Marshal) were circulated.

In 1988, Banknotes of 5,000 Intis (featuring Miguel Grau – Navy Admiral) and 10,000 Intis (Cesar Vallejo – writer) were issued.

In 1989, Banknotes in the denominations of 50,000 Intis (Victor Raul Haya de la Torre – Politician) and 100,000 Intis (Francisco Bolognesi – Army Colonel) were introduced.

In 1990, Banknotes of 500,000 Intis (Ricardo Palma – writer) and 1,000,000 Intis (Hipolito Unanue – Medical Doctor) were added.

In August 1990, the highest denomination 5,000,000 Intis (featuring Antonio Raimondi – Scientist) was also added.

In 1991, the “Nuevo Sol” replaced the Inti. At a staggering rate of 1 million Inti to I Nuevo Sol or 1 billion old Soles to 1 Nuevo Sol.

Nuevo Sol (1991 – present day):

In 1991, the “Nuevo Sol” replaced the Inti. at a staggering rate of 1 million Intis to I Nuevo Sol or 1 billion old Soles to 1 Nuevo Sol, because Peru was undergoing hyperinflation.

The Nuevo Sol was sub-divided into 100 Cents or Centimos.

The introduction of the Nuevo Sol marked a return to Peru’s historic currency, the Sol which was in circulation from 1863 to 1985.

Out of all Latin American currencies, the Nuevo Sol is presently one of the most stable one.

Central Reserve Bank of Peru or “Banco Central de Reserva del Peru” (in Spanish):

Established in 1922, the Central Reserve Bank of Peru is the Peruvian Central Bank tasked with the main purpose of preserving monetary stability in the country.

Presently, it supervises the minting of Nuevo Soles coins and printing of Banknotes.

Its Branch in Arequipa was established in 1871, which is overseeing issuance and Banking Supervision related matters in Southern Peru.

Links to some other interesting posts on South American countries & Mexico:

1) The Travels of a silver Mexican Peso struck in 1898 and restruck in 1949 for the Chinese Government

2) Brazilian Currency: Brazilian Real

3) The 31st Summer Olympics 2015 or Rio-2016 - Brazil

4) Currency and Coinage of Guatemala

5) Currency and Coinage of the Republic of Chile (Part I)

6) Currency and Coinage of the Republic of Chile (Part II)

7) Banknotes and Coinage of Colombia (Part I)

8) Banknotes and Coinage of Colombia (Part II)

9) Currency and Coinage of Mexico - Pesos and Centavos (Part I)

10) Currency and Coinage of Mexico - Pesos and Centavos (Part II)

11) Evita or Eva Peron - A Commemorative/Circulating 100 Pesos Banknote issued on her in 2012

12) Currency and Coinage of Peru: Nuevo Sol and Centavo (Part I)

13) Currency and Coinage of Peru: Nuevo Sol and Centavo (Part II)

14) Currency and Coinage of Peru: Nuevo Sol and Centavo (Part III)

 15) 2014 FIFA World Cup held at Brazil