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Bloomberg
The International Monetary Fund (IMF) approved an $11 billion credit line for Peru as the South American nation’s economy endures a slump that may be the deepest in more than a century. The two-year flexible credit line is a precautionary measure that should boost market confidence and provide insurance against downside risks, the fund said.
Peru becomes the third country in Latin America to receive the credit line after Mexico and Colombia. Neighbouring Chile has also requested the same instrument. The credit line is intended for nations with strong fundamentals and a track record of good economic performance and policy, and Chile and Peru were seen as potential recipients ever since it was created in 2009, said IMF Western Hemisphere Director Alejandro Werner.
Their requests for the line as the pandemic roils the global economy were “very prudent and very timely,†Werner said.
Peru’s central bank said in a statement that it will only use the credit line if an external shock significantly depletes
its international reserves and capital inflows.
The sol rose 0.2% to 3.429 per dollar at 11:50 a.m. in Lima. The currency plunged to an 18-year low in March as the pandemic triggered a rout in international markets.