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Peru’s Inti Currency Is Just One Reminder of When Peruvian Economy Went Crazy

One thousand intis banknote. Image on Flickr by user A.Davey (CC BY-NC-ND 2.0).

If you are Peruvian and over the age of 35, you probably remember the time when Peru's economy went crazy, especially during the second half of the 1980s. During those years, words like inflation –along with its superlative, hyperinflation – shortages, scarcity and maquinita trended in everyday language (maquinita, literally “little machine”, was a colloquial way to refer to the inorganic emission of currency not backed by the Central Reserve Bank of Peru, the country's issuing entity).

It was during this time that the government created a new currency called the inti (the Quechuan word for “sun”), a short-lived currency that existed between 1985 and 1991, and that due to huge devaluation, was replaced by the nuevo sol (literally “new sun”, today officially known just as sol). Figures don't lie, in 1985 one inti amounted to one thousand nuevos soles; but in 1991, the nuevo sol amounted to one million intis.

During those years, the country's cumulative inflation rate reached up to 2,178.49%. A figure that looks astronomic when compared with the 3.23% inflation in 2016.

Although, it is important to note that during this period Peru was suffering regular domestic terrorism attacks, one of the many causes for this inflation rate was President Alan García's economic policy during his first administration (1985-1990). According to Wikipedia:

  • Ese gobierno siempre recurrió a los recursos del Estado para impulsar un funcionamiento privado a corto plazo compatible con una baja inflación aparente. Después de 2 años de experimento de una política económica improvisada, el gobierno aprista de Alan García fue autodestruyéndose. […].
  • A partir del tercer año de ese gobierno o desgobierno vinieron las reacciones de la población frente a los ajustes de los llamados “paquetazos”, seguido de las colas que tenían que hacer todos para conseguir una cierta cantidad de productos de primera necesidad como son leche, pan, arroz, azúcar.
  • That administration always resorted to state-owned resources to promote a short-term private operation compatible with apparent low inflation. After two years of experimenting with an improvised economic policy, Alan García's administration began auto-destructing. […].
  • From the third year of the administration, or lack of administration, the population started to react to economic adjustments known as paquetazos (literally “big packages), along with the long lines everybody had to form just to get essentials, such as milk, bread, rice, sugar.

Memories of shortages and long lines to get essentials prevail. Some citizens do not lose any opportunity to remind former President García of this, even today:

First tweet (by Alan García) complaining about a phone company: For 32 days, your service answers “we've registered a breakdown in your area”. When do you [plan to] fix it?
———-
Second tweet: Get in line, sir.

Today, when the media is again using the words like hyperinflation, lines and scarcity to refer to other countries, like Venezuela, some Peruvians are again reminded of the inti currency.

The blog Ratapelada tells us about the rapid banknote denomination changes and how Peruvians used to only pay with banknotes, as there were no coins in circulation.

La galopante hiperinflación aprista acabo con su existencia [del inti] de la manera más rápida posible. Una imagen recurrente de esta moneda se asocia con enormes fajos de billetes que, debido al fenómeno inflacionario, perdían su valor adquisitivo en cuestión de meses o semanas. Si bien los primeros billetes fueron los de 10, 50, 100 y 500 intis. Ya en 1986 se introdujo un billete de 1.000 intis. […] En 1988 fueron introducidos billetes de 5.000 y 10.000 intis. En 1989, fueron introducidos los billetes de 50.000 y 100.000 intis. A inicios de 1990 fue introducido un billete de 500.000 intis, y en el segundo semestre de ese mismo año empezaron a circular los billetes de 1 y 5 millones de intis.

The out-of-control hyperinflation by APRA party-led administration [Alan García's party] ended up with [inti's] existence as soon as possible. A recurring image of this currency is linked to huge wads of banknotes that, due to inflation, lost acquisition value in months or even weeks. The first banknotes were the 10, 50, 100 and 500 intis. By 1986, the 1.000 intis banknote was introduced. […] In 1988, 5.000 and 10.000 intis banknotes were introduced. In 1989, we had 50.000 and 100.000 banknotes. In early 1990, a banknote for 500.000 intis was introduced, and on the second half of that year, banknotes for 1 and 5 million intis started to circulate.

On Twitter, some users shared pictures of those high nominative value banknotes:

With one million intis, you could buy a can of milk.
They were all sold out.
over a million.

First tweet: 🤣🤣🤣, wake up you, POLITICAL ZOMBIE, this is not the 1990s anymore, when you fooled everybody. Remember your 5%!!!
——-
Second tweet: [Expresident] Alan [Garcia], do you remember this banknote? Indeed, 5 “million” intis. Today they could get you a modest breakfast with six pieces of bread, butter and jam!

That 5% is referred to the total votes Alan García got in the 2016 president election.

On the link: Peruvian banknotes: these are the intis from the 1980s [PHOTOS]
The intis were issued to replace our devalued soles, but they lived a short and unfortunate life.
——
Tweet: Peruvian banknotes: these are the intis from the 1980s [PHOTOS]

Intis nowadays: what could you buy today with these banknotes? [VIDEO]

Some online shopping websites even offer them as collectibles.

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