Press Release No. 97/10

Press Release: IMF Approves Credits to Support a Reduction of Peru's Commercial Debt

February 13, 1997

The International Monetary Fund (IMF) approved a disbursement totaling SDR 160.5 million (about US$223 million) to support Peru's debt and debt-service reduction (DDSR) operation with its external commercial creditors. The disbursement consists of an augmentation of the amount of Peru's current Extended Fund Facility (EFF) credit approved July 1, 1996 (see Press Release No. 96/37), by SDR 51.9 million (about US$72 million) and the release of the equivalent of SDR 108.6 million (about US$151 million), corresponding to the total accumulated amount set aside under the EFF credit.

Following the completion of the DDSR operation, the ratio of scheduled debt-service obligations to commercial banks will be reduced to 3.1 percent of exports of goods and nonfactor services in 1997 from 7.4 percent in 1995. The operation is cost effective and is expected to provide the basis for a return to voluntary financing by foreign commercial creditors. A debt rescheduling was also granted last July by Paris Club creditors, providing further debt relief over the medium term and substantially improving the prospects of Peru's external viability by the end of the current EFF credit.

Peru joined the IMF on December 31, 1945. Its quota ¹ is SDR 466.1 million (about US$648 million). Its outstanding use of IMF credit currently totals the equivalent of SDR 642.7 million (about US$894 million).

¹ A member's quota in the IMF determines, in particular, the amount of its subscription, its voting weight, its access to IMF financing, and its share in the allocation of SDRs.