The International Monetary Fund has approved Peru’s request for a two-year $11 billion flexible credit line to be used as precautionary financing as the copper-rich country responds to the coronavirus pandemic.
IMF Managing Director Kristalina Georgieva said in a statement that Peru had achieved impressive macroeconomic outcomes given its “very strong policy and institutional frameworks,” but remained vulnerable to external risks such as a prolonged coronavirus outbreak.
The IMF’s Flexible Credit Line was established in 2009 to prevent crises, giving countries with very strong track records the flexibility to draw funds at any time during the period of the arrangement. Disbursements are not phased nor conditioned on compliance with policy targets as in traditional IMF programs.
IMF Managing Director says Peru’s low inflation and prudent fiscal management had been instrumental in lowering government debt and building fiscal buffers, while effective financial sector supervision had contributed to preserving financial stability.