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| Peru half Libra Peruana de Oro banknote |
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| media Libra Peruana de Oro |
The gold Libra was equal to the British sovereign.
Obverse: Portrait of Liberty.
Reverse: Oil industry activity.
Printed by American Bank Note Company, New York
Creation of the Peruvian Pound (Libra Peruana)
1897-1930
The depreciation of silver from 1870 accelerated as the world's largest economies, especially Great Britain, adopted the gold standard and abandoned silver as store of value. Other countries started to liquidate their silver reserves, contributing further to its depreciation. Peru and other silver producers like Mexico and the U.S. resisted adoption of the new standard for some years, but eventually abandoned bimetallism.
In December 1897 a new currency was created in Peru, the Peruvian pound (Libra Peruana), after the prestigious British pound. In view that bills were still regarded in low esteem, it was agreed that the Peruvian pound would circulate only in gold coins. It was established that the Peruvian pound would be a 22 millimeter, 7.988 gram, fine gold disk showing a representation of Inca Emperor Manco Cápac.
The Peruvian Pound Between 1897 and 1930
1897-1930
The value of the Peruvian pound was fixed at 10 soles (which is why such amount was commonly known as Libra for many years after the Peruvian pound ceased to circulate). Silver soles (worth 100 cents) continued to be issued. From 1922 Peruvian pound bills made their appearance in denominations of ½, 1, 5, and 10 pounds.
Together with the creation of the Peruvian pound (Libra Peruana) in 1897, it was established that the National Mint would cease to produce gold and silver coins commissioned by the private sector. From then on the government would decide the amount and timing of coin issuances, and would provide the necessary gold and silver for this purpose. By reserving to the government an instrument previously in the hands of miners and merchants, this measure marked the beginning of modern monetary policy in Peru. Before this innovation, money shortages had been common and attempts had been made to resolve them by issuing bank and fiscal bills, with adverse results. The 1929 world crisis sparked a surge in the price of gold, seen internationally as the best refuge asset. This disrupted the monetary order and led to a massive abandonment of the gold standard. In Peru, the last Libra Peruana issuances were made in 1930.