The official currency of Peru is the nuevo sol (symbol: S/), which is divided into 100 céntimos. The currency is available in denominations of 10, 20, 50, 100, and 200 sols, while coins are available in denominations of 10, 20, and 50 céntimos, as well as 1, 2, and 5 sols.
The sol has been the currency of Peru since 1991, replacing the inti. If you are interested in understanding more about Peru’s currency, its history, and practical considerations for financial transactions in the country, this article will provide an overview of the Peruvian Sol.
Historical Journey of the Peru Currency
The history of the Peru currency dates back to the Spanish colonial era. The Spanish colonial real was the local currency during the 16th to 19th centuries. It was equivalent to 8 reales to 1 peso.
After Peru gained independence, it introduced its version of the real in 1822. The Peruvian real was initially worth 1/8 peso, but in 1858, reales worth 1/10 peso were introduced in their transition to a decimal currency system.
In 1985, the inti was introduced, replacing the sol, which had suffered from high inflation. One inti was equivalent to 1,000 soles. The inti was replaced by the nuevo sol in 1991, which is the current currency of Peru. The nuevo sol is subdivided into 100 centimos.
History of Coins
The first coins in Peru were introduced by the Spanish conquistadors in the 16th century. These coins were made of gold and silver and were used to pay for goods and services. In 1863, the first Peruvian sol coin was introduced, which was made of gold and had a value of 10 soles.
Over the years, the design of the sol coin changed, and it was eventually replaced by the inti in 1985. The inti was named after the sun god of the Inca Empire and was in circulation until 1991 when it was replaced by the current currency, the nuevo sol. Today, the nuevo sol is divided into 100 céntimos and is available in coins of 5, 10, 20, and 50 céntimos, and 1, 2, and 5 nuevos soles.
New coins were introduced in Peru in 1991, featuring values of 1, 5, 10, 20, and 50 céntimos, as well as S/1. Later, in 1994, S/2 and S/5 coins were added. However, the one- and five-céntimo coins are rarely used.
In 2011, the aluminium one-céntimo coin was removed from circulation, followed by the removal of the five-céntimos coin in 2019. For cash transactions, amounts are rounded down to the nearest ten céntimos or up to the nearest five, while electronic transactions remain in exact amounts.
An aluminium five-céntimo coin was introduced in 2007, and all coins display the coat of arms of Peru on the obverse and their denomination on the reverse. The bimetallic S/2 and S/5 coins feature Nazca Lines’ hummingbird and condor figures.
History of Bills
In 1990, Peru introduced banknotes for denominations of S/10, S/20, S/50, and S/100, each featuring a portrait of a notable figure in Peruvian history on the front. The notes are uniform in size (140 x 65 mm). In August 1995, a S/200 banknote was introduced.
A new series of banknotes began in 2021, starting with S/10 and S/100 notes in July, followed by S/20 and S/50 notes in July 2022, and a S/200 note in December 2023.
Watermarks on banknotes, placed in the upper left corner of the front side, serve to prevent counterfeiting. The term “sol” (meaning sun) has been associated with Peru’s currency since 1857, but actual sol coins were only produced later. In 1930, under the second administration of Augusto B. Leguía, the “sol de oro” was established as the official monetary unit.
The 10 nuevos soles banknotes prominently feature the image of José Abelardo Quiñones Gonzales, a Peruvian war pilot celebrated as a national hero in the country.
Inflation and Buying Power of Sol
In recent years, Peru has experienced moderate inflation rates. The Central Reserve Bank of Peru (BCRP) has set an inflation target of 2%, which is within the range of most developed countries.
Peru struggled with hyperinflation after the global economic downfall of 1929, and the sol was introduced in 1863. The sol, later sol de oro, was the currency of Peru between 1863 and 1985 when it was replaced by the inti. One sol was equivalent to 10 dineros or 100 centavos. The ISO 4217 currency code for the sol was PES.
Peru’s economy has been growing steadily in recent years, with a GDP growth rate of 2.5% in 2021 and a projected growth rate of 2.6% for 2023 and 3.2% for 2024, according to the International Monetary Fund (IMF). The country has a diverse economy, with key sectors including mining, agriculture, manufacturing, and services.
Peru’s currency, the sol, has been relatively stable in recent years, with occasional fluctuations due to political and economic events. In 2022, the sol experienced a significant drop in value due to political risk, but it has since bounced back and is expected to continue strengthening due to rising interest rates and the country’s strong copper exports.
Peru has also implemented several economic reforms in recent years to improve its business climate and attract foreign investment. These reforms include simplifying the tax system, reducing bureaucracy, and improving infrastructure. As a result, Peru has become an increasingly attractive destination for foreign investors, particularly in the mining and energy sectors.
Peruvian Sol
The Sol is Peru’s currency, represented by the symbol S/ and subdivided into 100 céntimos. Its ISO 4217 currency code is PEN. In 1991, it replaced the Peruvian inti and revived the historical name of Peru’s currency, which was in use from 1863 to 1985.
Although “sol” is rooted in the Latin term “solidus” (meaning ‘solid’), it also translates to “sun” in Spanish, maintaining a connection with the previous currency, inti, named after the Inca Sun God, Inti. Initially called nuevo sol at its launch in 1991, it was officially renamed sol on November 13, 2015, by the Peruvian Congress.
10 sol
S/10 Introduced in 1991, green, featuring José Quiñones Gonzales. The reverse shows Machu Picchu. In 2021, a new version features María Isabel Granda y Larco with an image of a vicuña and Ismene amancaes.
20 sol
S/20 Introduced in 1991, brown, featuring Raúl Porras Barrenechea. The reverse shows the interior of Torre Tagle Palace. In 2022, a new version features José María Arguedas Altamirano with an image of an Andean condor and Cantua buxifolia.
50 sol
S/50 Introduced in 1991, orange, featuring Abraham Valdelomar. The reverse shows the Oasis of Huacachina, Ica. In 2022, a new version features María Rostworowski Tovar with an image of a jaguar and Puya raimondii.
100 sol
S/100 Introduced in 1992, blue, featuring Jorge Basadre. The reverse shows the National Library of Peru. In 2021, a new version features Pedro Paulet with an image of the Marvelous spatuletail and Phragmipedium kovachii.
200 sol
S/200 Introduced in 1995, pink, featuring Rose of Lima. The reverse shows the Convent of Santo Domingo, Lima. In 2023, a new version features Tilsa Tsuchiya with an image of Rupicola peruvianus (Peruvian national bird) and Dalechampia aristolochiifolia.
Currency Usage in Peru
If you are planning to travel to Peru, it’s important to know about the local currency and how it’s used. Here are some important things to keep in mind when it comes to currency usage in Peru.
Is USD Accepted in Peru?
Yes, USD is widely accepted in Peru, especially in tourist areas, but it’s important to note that the exchange rate may vary. It’s recommended to use the local currency, the Peruvian Sol (PEN), for everyday transactions. However, USD can be used for larger purchases such as hotel bookings, tours, and high-end restaurants.
As mentioned earlier, the official currency of Peru is the Peruvian Sol. The currency code is simply SOL, and the symbol used for writing out values and prices is S/. The Peruvian Sol banknotes come in denominations of 10, 20, 50, 100, and 200, while coins are available in denominations of 10, 20, and 50 cents (céntimos), as well as larger denominations of 1, 2, and 5 nuevos soles.
If you plan to exchange USD to Peruvian Sol, it’s recommended to do so at an authorized currency exchange office or bank. Avoid exchanging currency on the street as this may result in counterfeit bills or a poor exchange rate. Also, keep in mind that many establishments may not accept USD bills that are worn or torn.
In summary, while USD is accepted in Peru, it’s best to use the local currency for everyday transactions. Make sure to exchange currency at authorized locations and be aware of the current exchange rate to avoid any issues.
Exchanging Currency in Peru
If you’re planning a trip to Peru, you’ll need to exchange your currency for Peruvian sol. Here’s what you need to know about exchanging currency in Peru.
Where Can I Exchange Peru Currency?
There are several options for exchanging currency in Peru, including banks, exchange houses, and hotels. Banks often have long queues, which can make exchanging currency a time-consuming process. Exchange houses, also known as casas de cambio, offer a more convenient option for exchanging currency. They have competitive exchange rates and don’t charge a commission. You can find exchange houses in most cities and tourist areas.
Hotels also offer currency exchange services, but they typically have less favorable exchange rates and may charge a commission. It’s best to compare rates between different exchange options before making a decision.
What to Know Before Exchanging Currency
Before exchanging your currency, it’s important to be aware of a few things. First, it’s a good idea to check the current exchange rate to ensure you’re getting a fair deal. You can check the current exchange rate online or at an exchange house.
Second, make sure to bring your passport with you when exchanging currency. Exchange houses and banks are required to verify your identity before exchanging currency.
Finally, be aware of the potential for counterfeit bills. It’s a good idea to check your bills for authenticity before accepting them. Peruvian currency has several security features, including watermarks, security threads, and color-shifting ink. Familiarize yourself with these features before exchanging currency to avoid accepting counterfeit bills.
Choosing Between USD and Peru Currency
When traveling to Peru, you may be wondering whether to use US dollars or Peruvian soles. While both currencies are widely accepted, it’s important to consider the advantages and disadvantages of each.
One advantage of using USD in Peru is that it’s a widely accepted currency. Many businesses, especially those catering to tourists, will accept USD. Additionally, if you’re from the United States, you won’t have to worry about exchanging currency before your trip.
Another advantage of using USD is that it’s a stable currency. The exchange rate between the USD and the Peruvian sol can fluctuate, so using USD can provide a sense of stability when making purchases.
Using Peruvian soles in Peru can be advantageous in certain situations. For example, if you’re traveling to rural areas or smaller towns, it may be more difficult to find businesses that accept USD. In these cases, having Peruvian soles on hand can be helpful.
Additionally, using Peruvian soles can help you avoid exchange fees. If you withdraw money from an ATM or exchange currency, you may be charged a fee. Using Peruvian soles can help you avoid these fees and potentially save money.
Ultimately, the decision of whether to use USD or Peruvian soles comes down to personal preference and the situation. It’s a good idea to have both currencies on hand, especially if you plan to travel to rural areas. Keep in mind that the exchange rate can fluctuate, so it’s a good idea to check the current rate before your trip.
Exchange rate
You can exchange your money at banks, exchange houses, and some hotels. It’s recommended to exchange your money at banks or exchange houses as they usually offer better rates. When exchanging money, be sure to bring your passport as it’s required by law to exchange currency.
ATMs are widely available in Peru, especially in major cities. However, it’s important to note that some ATMs charge fees for withdrawals. Check with your bank to see if they have any partnerships with banks in Peru to avoid or reduce these fees.
Credit cards are widely accepted in Peru, especially in major cities. Visa and Mastercard are the most widely accepted. However, it’s always a good idea to carry some cash with you as some smaller businesses may not accept credit cards.
Convenience
When it comes to convenience in managing your finances while in Peru, here are some key tips. Firstly, it’s advisable to always carry some cash, particularly smaller bills and coins, for smoother transactions. When exchanging currency, ensure to have your passport with you as it may be required.
To make your financial transactions more seamless, check with your bank beforehand to see if they have partnerships with banks in Peru. This can help you avoid or reduce ATM fees during your travels. Furthermore, it’s crucial to notify your bank and credit card company about your travel plans to prevent any potential issues with transactions being flagged as fraudulent.
While the US dollar is widely accepted in Peru, opting for the local currency, the Peruvian sol, is often more convenient. This choice can help you avoid additional fees associated with currency exchange. Moreover, using the local currency may be necessary, as some vendors may only accept it, emphasizing the importance of having cash readily available for various transactions.
Fees
Navigating fees associated with currency exchange requires careful consideration. Firstly, it’s advisable to steer clear of exchanging currency at airports, as they typically impose higher fees and provide less favorable exchange rates.
To minimize fees during your travels in Peru, check with your bank to determine if they have partnerships with local banks. This can be a strategic move to either avoid or reduce ATM fees, contributing to a more cost-effective financial experience.
Moreover, it’s crucial to inquire with your credit card company about any foreign transaction fees they may charge. Some credit cards offer waivers for these fees during international travel, providing a potential avenue to save on additional costs.
When engaging in currency exchange, be mindful of potential extra charges that may apply. Certain currency exchange services might impose fees or offer less favorable exchange rates. To sidestep these fees, opt for reputable banks or exchange bureaus when exchanging currency, ensuring a more economical approach to managing your finances.
Tips
When traveling to Peru, it’s important to have a mix of cash and credit cards. While credit cards are widely accepted in major cities, cash is necessary for smaller purchases and in rural areas. Additionally, it’s essential to have small bills on hand, as many vendors may not have change for larger bills. Finally, it’s important to keep your cash and credit cards secure while traveling to avoid theft or loss.
Cost of Living in Peru
When planning a move to a new country, one of the most important factors to consider is the cost of living. In Peru, the cost of living is generally lower than in many other countries, making it an attractive option for those looking to live on a budget.
The cost of living in Peru is relatively low compared to other countries in the region, making it an attractive destination for expats and digital nomads. According to Numbeo, the cost of living in Lima, the capital city, is around 50% cheaper than in New York City.
According to Expatistan, a single person’s estimated monthly cost in Peru is $1,069, which is cheaper than 75% of countries in Latin America. However, Numbeo estimates that a single person’s estimated monthly costs are $486.1 without rent, which is 58.3% lower than in the United States. It’s important to note that the cost of living can vary depending on the location and lifestyle of the individual.
In general, housing is one of the biggest expenses in Peru. Renting an apartment in Lima, the capital city, can cost between $350 and $600 per month, depending on the location and size of the apartment. Utilities such as electricity, water, and gas are also relatively inexpensive, costing around $50 per month on average.
Food is another major expense in Peru, but it is generally cheaper than in many other countries. A meal at an inexpensive restaurant can cost around $3 to $5, while a meal at a mid-range restaurant can cost around $10 to $15. Groceries are also relatively inexpensive, with a weekly shopping trip for a single person costing around $30 to $40.
Transportation costs in Peru are also relatively low. A one-way ticket on public transportation in Lima costs around $0.60, while a taxi ride within the city costs around $2 to $3. Gasoline prices are also lower than in many other countries, costing around $1.25 per liter.
Overall, the cost of living in Peru is generally lower than in many other countries. However, as with any country, the cost of living can vary depending on the individual’s lifestyle and location. It’s important to research and plan accordingly to ensure a comfortable and affordable living experience in Peru.
Don’t Get Scammed Tips
When it comes to handling money in Peru, safety and security are major concerns. It is important to be aware of the risks and take precautions to protect yourself and your money. Here are some tips to help you stay safe:
- Keep your money hidden
When you’re out and about, keep your money hidden and secure. Avoid carrying large amounts of cash, and use a money belt or other secure wallet to keep your money and important documents close to your body.
- Exchange money at reputable locations
If you need to exchange money, make sure to do so at a reputable location such as a bank or exchange bureau. Avoid exchanging money on the street, as this is a common place for scammers to operate.
- Carry small bills
When paying for things in Peru, it’s a good idea to carry small bills. This will help you avoid giving someone a large bill and receiving counterfeit currency in return. It’s also a good idea to keep some change on hand for small purchases.
- Use ATMs with caution
ATMs are a convenient way to get cash, but they can also be a target for thieves. Make sure to use ATMs located in well-lit, public areas, and cover the keypad when entering your PIN. It’s also a good idea to check for any suspicious devices attached to the ATM, such as card skimmers.
- Be aware of common scams
Scammers are always looking for ways to take advantage of tourists, and Peru is no exception. One common scam involves counterfeit currency. Make sure to examine any bills you receive carefully, and look for the watermark and security thread. Another scam involves people posing as police officers or bank employees and asking to see your money to “check for counterfeits.” Never let anyone take your money out of your sight.
Be wary of strangers who offer to help you with anything, such as carrying your bags or taking you to a specific destination. They may ask for money or steal your belongings.
