WORLD BANK SUSPENDS LOANS TO PERU - CENTRAL BANK
The World Bank has suspended loans to Peru
because the country has over two months of payment arrears with
the lending agency, central bank general manager Hector Neyra
said.
     He told reporters the government decided to stop paying
the World Bank because scheduled repayments outweighed the
loans it was due to receive.
     The measure was the latest hard-line debt stance adopted
by the government of President Alan Garcia, one of Latin
America's most delinquent debtors. The 22-month-old
administration has cut repayments to 10 pct of export earnings
on nearly all its 14.4 billion dlr foreign debt.
     Neyra said since late 1986 Peru had sought an accomodation
with the World Bank under which it would receive more credits
than it would remit in repayments.
     Neyra stressed Peru was not withdrawing from the world
bank. The country had recently increased its capital
suscription in the institution by about three mln dollars.
    The Bank would immediately resume loan disbursements to
Peru once it cleared its arrears, he said. He did not specify
the value of the overdue payments. The economy ministry said
Peru's debt to the world bank was 521 mln dlrs at end-1985.
    At the end of last year, Peru's total foreign debt stood at
14.46 billion dollars, 13.17 billion dollars of which is
medium- and-long-term debt, the central bank said. Total
arrears were 5.42 billion dollars.
    Central bank president Leonel Figueroa said Peru had enough
hard currency, gold and silver on hand to cover 10 or 11
months' worth of imports.
    The holdings of the two precious metals and the hard
currencies were valued at 2.172 billion dlrs on May 22, 1987,
he said.
    Gross reserves were slightly lower at 1.857 billion dlrs
because this classification did not include silver holdings and
undervalued the central bank's gold.
    Reserves were projected to fall at most 150 mln dlrs this
year, he said.
 Reuter
