Peru Exits the Flexible Credit Line Arrangement with the IMF

May 21, 2024

Washington, DC: The Peruvian authorities have notified the International Monetary Fund (IMF) of their intention to let the current Flexible Credit Line (FCL) arrangement, approved by the IMF’s Executive Board on May 27, 2022, expire on May 26, 2024 and not to seek a successor FCL arrangement. This decision has been expected given the authorities’ previous intention to exit the arrangement conditional on evolution of external risks.

Peru’s initial FCL arrangement of 600 percent of quota was approved by the IMF’s Executive Board in May 2020, shortly after the beginning of the global COVID-19 pandemic, with the objective of providing strong signaling, additional buffers, and insurance against external shocks in a context of heightened risks. Peru reduced its access to 300 percent of quota in a successor arrangement approved in May 2022 amid improved international reserves and lower external financing needs, in line with the authorities’ strategy of gradually exiting the instrument, once external conditions allow.[1] Over this time, Peru has treated both arrangements under the FCL as precautionary and continued to maintain its strong foreign exchange reserves, low public debt, and prudent fiscal position. In May 2023, at the time of the current FCL’s midterm review, Peruvian authorities reiterated their intention to exit the FCL conditional on the evolution of external risks.

At the conclusion of the 2024 Article IV Consultation on May 20, 2024,[2] and against the background of reduced external risks and ample international reserves, the IMF’s Executive Board commended the authorities for very strong economic fundamentals and institutional policy frameworks, a sustained track record of implementing very strong macroeconomic policies despite political turmoil, and commitment to maintaining such policies in the future. It also noted that maintaining very strong institutions and policies would further strengthen and reinforce Peru’s resilience against external risks.   

The IMF’s FCL instrument was established on March 24, 2009, and further enhanced on August 30, 2010 and most recently on October 6, 2023.[3] The FCL is designed for crisis prevention and mitigation as it provides qualifying members the flexibility to draw on the credit line or treat it as precautionary. Disbursements are neither phased nor conditioned on compliance with any policy targets as in traditional IMF-supported programs. The FCL is available to qualified countries with very strong fundamentals, institutional policy frameworks, and track records of policy implementation. The FCL is a renewable credit line, which could be approved for either one or two years. There is no cap on access to Fund resources under the FCL, and access is determined on a case-by-case basis.

Peru has been a member of the IMF since 1945 and has a quota of SDR 1,334.5 million (about US$ 1,761 million).


[1] The first FCL for Peru was approved on May 28, 2020 (see Press Release No. 20/224). Successor FCL arrangement was approved on May 27, 2022 (Press Release No. 22/173).

[2] See Press Release No. 24/172

[3] See Press Release No. 09/85, Press Release No. 10/321 and Press Release No. 23/340

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