Exclusive: Peru joins commodity-exporter queue for World Bank financing

Wed Feb 3, 2016 6:42pm EST
 
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By Marco Aquino and David Lawder

LIMA/WASHINGTON (Reuters) - Peru has become the latest commodity exporter to seek financing help from the World Bank amid fiscal and currency pressures brought on by collapsing prices for metals, oil and other raw materials.

Peruvian government sources and a World Bank official said on Wednesday that talks were underway for two new credit lines that will bolster Lima's available government resources.

Amounts for the three-year loan facilities could not be disclosed as the arrangements have not yet been sent to the World Bank board for approval, the bank official said.

Peru has no immediate plans to draw on the credit lines, and they will be kept in reserve.

"They are contingent credit lines whose objective is to have resources immediately available for any eventual needs," a government source in Lima told Reuters. "We don't expect to use these resources in the near term. Nor do they substitute traditional financing through bond issuances or other debt instruments such as loans from multilateral institutions for financing projects."

The World Bank also is engaged in loan discussions with Africa's two biggest oil exporters, Nigeria and Angola, and the Caspian Sea crude producer Azerbaijan.

The collapse of oil and commodities prices and demand brought on by China's massive growth slowdown has widened budget deficits of many oil and mineral exporters and caused capital outflows that have pressured currencies.

With foreign currency reserves still above crisis levels, several of these countries have opted not to seek rescue loans from the International Monetary Fund, choosing instead to explore financing available through World Bank programs aimed at supporting institutional and market-based reforms.   Continued...

 
A man is silhouetted against the logo of the World Bank at the main venue for the International Monetary Fund (IMF) and World Bank annual meeting in Tokyo in this  October 10, 2012 file photo. REUTERS/Kim Kyung-Hoon