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Peru's Black Market in Foreign Exchange*

Published online by Cambridge University Press:  02 January 2018

Robert Grosse
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Extract

The foreign exchange market in Peru experienced the same kinds of overwhelming volatility and severe shocks as the rest of the national economy during the 1980s. Beginning in 1980, Peru's economy was buffeted by a severe decline in copper prices followed, in 1982, by a huge increase in real debt servicing costs as a result of the drop in industrial-country inflation and remaining high dollar interest rates. This simultaneous squeeze on export earnings and hike in debt service cost led to an inability to meet foreign debt commitments and, essentially, a cutoff from access to foreign capital.

Type
Research Article
Information
Journal of Interamerican Studies and World Affairs , Volume 33 , Issue 3 , Fall 1991 , pp. 135 - 168
Copyright
Copyright © University of Miami 1991

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Footnotes

*

This article discusses the black market in foreign exchange that existed in Peru prior to the government of President Fujimori, who took office in August 1990. The market continues today, but some of the characteristics have changed significantly due to the process of economic opening now underway.

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