May 8, 2020 / 10:30 PM / 21 days ago

UPDATE 1-IMF says it will back Peru's request for $11 bln flexible credit line

(Adds detail from statement, context)

WASHINGTON, May 8 (Reuters) - The International Monetary Fund on Friday said it would back Peru’s request for a two-year $11 billion flexible credit line to be used as precautionary financing, as the copper-rich South American nation seeks to contain the coronavirus pandemic.

Citing what it called Peru’s “very strong policy frameworks and track record,” the IMF said Managing Director Kristalina Georgieva intends to recommend that the Fund’s executive board approve Peru’s request in coming weeks.

The board discussed Peru’s request during an informal meeting on Friday and will meet again to vote on the matter in coming weeks.

The world’s second-largest copper producer last week said it would issue a fresh bond worth up to $4 billion to help offset the impact of the coronavirus crisis.

It is looking to underwrite an historic stimulus package worth about 12% of gross domestic product.

Peru on Friday extended a nationwide lockdown until May 24 amid a sharp rise in the number of cases of COVID-19, the respiratory illness caused by the coronavirus. More than 58,500 cases have been reported as of this week, and over 1,600 deaths.

The IMF’s Flexible Credit Line is available to countries with what the Fund regards as strong policies and frameworks. It is intended to safeguard economies against external shocks by providing large, upfront access to IMF resources. (Reporting by Andrea Shalal Editing by Chris Reese and Rosalba O’Brien)

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