The Government of Peru published this Thursday a decree that authorizes the country's formal workers to withdraw, in an extraordinary manner, up to 20,600 soles (about $5,500) from their individual accounts in the Pension Fund Administrators (AFP).
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The law that allows the withdrawal of up to four tax units (UIT) was published in the legal regulations bulletin of the official newspaper El Peruano a day after the Minister of Economy and Finance, José Arista, announced that the Executive was not leaving to oppose that decision, which was approved last week by Congress.
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He added that affiliates will receive a first disbursement of a UIT, equivalent to 5,150 soles, one month after submitting their application to the AFP to which they are registered. It also established that the funds that are withdrawn maintain the status of intangibles, so they cannot be subject to discount, compensation, embargo, retention or any form of affectation, except for those derived from debts for food, and for a maximum of 30% of the total.
On Wednesday, the Minister of Economy and Finance reported that the Executive had agreed in the Council of Ministers that it was not going to observe the law approved by Congress “in response to the high vote” it received in plenary. “We see that it is not appropriate to further delay the promulgation of this rule,” commented Arista.
Right-wing parliamentarian José Luna Gálvez, who promoted the initiative, maintained that the delivery of these funds will provide “economic relief” for thousands of families in the country and will be “an engine to energize” the economy and reactivate small businesses.
The delivery of these funds will provide economic relief for thousands of families in the country
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The position of the Central Reserve Bank of Peru (BCRP), for example, was contrary to this fund withdrawal project, since, according to its president, Julio Velarde, the outflow of millions of soles from these private funds, “can increase the country's credit risk”.
The president of the central bank added that successive withdrawals have reduced liquid assets in the Peruvian market and, in turn, an increase in the yields of Public Treasury bonds.
Since the year the pandemic began, and due to its serious monetary consequences on Peruvian society, Congress has approved a series of partial withdrawals from the private funds managed by the Pension Fund Administrators to alleviate the economic impact on workers.
EFE
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