* The president of Peru’s central bank (BCRP), Julio Velarde, has warned that a congressional proposal to allow Peruvians to make another early withdrawal from private pension funds (AFPs) could see a total of PEN29.6bn (US$7.9bn) withdrawn from the pension system. This, he said, amounts to 26% of the funds currently held by the AFPs. Addressing congress’s economic commission, Velarde said that this would negatively impact Peru’s credit rating, resulting in higher interest rates, and would leave Peruvians with insufficient pension funds when they reach retirement age. In 2020, congress began permitting early withdrawals from AFPs to help citizens cope with the economic impact of the coronavirus (Covid-19) pandemic. Congress has so far authorised six early pension withdrawals, and its economic commission is currently studying several bills put forward by different parties proposing a seventh withdrawal.
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LatinNews Daily - 23 November 2023
In brief: Peru’s central bank warns against more early pension withdrawals
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