Peru's Economy
Peru's Independent Central Bank
How Peru's central bank, independent under the 1993 constitution, kept inflation low for decades, and managed a partially dollarised economy.
Peru’s central bank (BCRP) is highly respected.
Independence
The 1993 constitution banned the central bank from financing the government.
Inflation targeting
Since 2002, it targets inflation of 1-3%, among the lowest targets in the region.
Julio Velarde
Julio Velarde has led the bank since 2006, across many presidents.
Dollarisation
After hyperinflation, many Peruvians kept savings in dollars; the bank reduced this over time.
Reserves
Large foreign reserves protect against shocks.
Lesson
A credible central bank can survive political turmoil.
While Peru changed presidents repeatedly, the same central bank governor kept inflation low.
Peru's bank stayed independent.
- The 1993 constitution protects the central bank.
- It targets 1-3% inflation.
- Velarde has led it since 2006.
- Dollarisation was reduced.
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