The Peruvian inti was replaced in 1991, the casualty of an experiment in heterodox economics that ended in one of the hemisphere’s worst hyperinflations. Introduced on 1 February 1985 to replace the worn-out sol de oro at 1,000 to 1, the inti was meant to be a fresh start. Instead it became the currency of the García years — a presidency that tried to spend and price-control its way to growth, financed the attempt by printing, and watched the strategy detonate. By August 1990 monthly inflation reached roughly 397%, prices doubling about every nine days, and the inti was finished. The verdict is Replaced: the inti was swept away by the nuevo sol on 1 July 1991 at a million to one, after a stabilization so severe it earned its own name — the “Fujishock.”
The mechanism combined ordinary deficit monetization with a distinctive policy folly. President Alan García, elected in 1985, launched a heterodox program: freeze prices and the exchange rate, hold down interest rates, cap external debt service at 10% of export earnings, and prime demand with public spending to spur growth. For two years it produced a boom. Then the controls and the deficit collided with reality. Cut off from foreign credit by the debt cap, the government financed its widening gap the only way left — the central bank’s printing press — and with prices frozen below cost, shortages spread and a black market metastasized. When the dam broke, inflation ran in two waves: a first spike in September 1988 as a desperate adjustment (“the Salinazo”) let suppressed prices loose, and a second, terminal surge in 1990.
That second wave crested in August 1990, the month the newly elected Alberto Fujimori abandoned his campaign promises and imposed shock therapy. On 8 August 1990 the government raised the gasoline price roughly thirtyfold, freed controlled prices, scrapped the multiple exchange-rate system, and committed to stop financing the deficit by printing. The monthly inflation rate that month was about 397%; the brutal price adjustment was the shock itself. Stabilization followed, more gradually than Argentina’s or Bolivia’s because Peru used a monetary anchor rather than a hard peg.
The inti, by then carrying notes up to 5,000,000, was retired on 1 July 1991, replaced by the nuevo sol at one million intis to one — restoring, in name, the “sol” the inti had displaced six years earlier. The replacement held as the stabilization took, though inflation took roughly five years to settle near 10%.
The Chilean escudo was a Chilean currency that did not survive Chilean politics. Introduced on 1 January 1960 to lop three zeros off the chronically inflating old peso — at 1 escudo to 1,000 pesos — it was meant to be a fresh, dignified unit. Fifteen years later it was destroyed by precisely the disease it had been minted to cure, and on 29 September 1975 the military government that had seized power two years earlier retired it and brought the peso back, again at 1,000 escudos to one peso. The verdict is Replaced: not a stabilization, not a mere lopping of zeros that left the currency intact, but the abolition of one failed unit and the reintroduction of its predecessor’s name on a new, stabilizing footing.
The fatal acceleration came in the three years of the Popular Unity government of Salvador Allende, 1970–1973. The driver was textbook deficit monetization. An ambitious program of wage rises, nationalizations, and frozen prices — the plan associated with Economics Minister Pedro Vuskovic — was financed not by taxation but by the central bank’s printing press. The fiscal deficit, around 1.4% of GDP in 1970, ballooned past 20% of GDP by 1973 on some estimates and toward 30% on others; the money base grew explosively, with currency issue rising roughly 178% in 1972 and on the order of 360% in 1973. With price controls holding official prices down, shortages, queues, and a vast black market did the real pricing. When the controls cracked, the suppressed inflation surged through.
The headline numbers are contested precisely because of those controls, and the dossier states the range rather than pretending to a single truth. Annual inflation reached roughly 255% in 1972 and is most often cited at around 508% to 605% for 1973; measured at free-market rather than official prices, some authorities put the August 1973 rate above 1,500% annualized. Whatever the exact figure, this was a true extreme inflation, and the escudo — a currency whose largest note had climbed to 10,000 escudos by 1974 — had effectively ceased to store value.
The political rupture is a matter of record and is noted here soberly, because the lens of this file is monetary, not partisan. On 11 September 1973 a military coup overthrew Allende; he died that day. The fiscal and monetary collapse did not end with the change of government — inflation ran above 600% in 1974 once remaining price controls were lifted and the suppressed pressure was released, and averaged in the hundreds of percent in 1975. The escudo was beyond saving. Decree Law 1,123, published on 4 August 1975, reintroduced the peso at 1,000 escudos to one, with the escudo formally withdrawn on 29 September 1975 — the act that closes this case.