DEFINITION of PEN (Peruvian Nuevo Sol)
The PEN is the currency abbreviation or currency symbol for the Peruvian nuevo sol (PEN), the currency of Peru. The Peruvian nuevo sol is made up of 100 céntimo and is often represented by the symbol S/. The word "sol" is Spanish for "sun," and its use here is meant to give power to the Peruvian people.
BREAKING DOWN PEN (Peruvian Nuevo Sol)
The high inflation in Peru during the 1980's forced the country to revalue their currency. The nuevo sol replaced the previous currency, the inti, at a rate of 1,000,000 to 1. A currency referred to as the old sol was used before the inti. It was replaced by the inti for the same reason the nuevo sol replaced the inti—hyperinflation.
Coins are denominated in 1, 2 (introduced later), 5, 10, 20, and 50 céntimo, and 1 sol. However, the 1,2 and 5 are rarely used and cash transactions are rounded down. Notes come in denominations of 10, 20, 50, 100, and 200 and all are printed and controlled by the Central Reserve bank of Peru. Most notes feature pictures of some of Peru's great natural landmarks, including the Chavin de Huantar and Machu Picchu.
The PEN is traded as a non-deliverable forward (NDF) for transactions through banks that don't have an onshore banking presence in Peru.
The PEN's value is correlated to the state of its local economy, which is dependent on tourism, commodities (gold, copper and zinc), coffee, and vegetables. Peru's biggest export partner is China, and its biggest import partner is the United States.