The Central Bank of Peru on Thursday almost doubled the amount of foreign deposits that banks must hold in reserve, in an attempt to cut off speculative short-term foreign capital inflows.

The central bank raised the reserve ratio for foreign deposits held domestically to 120%, up from 65% to deter "short-term speculative funds" from destabilising the nuevo sol, the Peruvian currency. The change means that for every Ns1 deposited in Peru from abroad, the local bank holding the deposit must place