823.5151/128: Telegram

The Ambassador in Peru ( Norweb ) to the Secretary of State

77. Reference the Department’s telegram No. 66, June 10, 7 p.m.

The Finance Minister called yesterday to express appreciation for the assistance rendered by the Export-Import Bank credit.
He said that due to the cooperative measures adopted between the banks, business, gold producers, and the Government, and the curbing of speculation, the exchange situation had been brought under control at least temporarily, and that in view of this favorable development it is his intention to hold in reserve for the present the $2,000,000 credit.
He added that the latter would have an important psychological effect; and that now he was prepared to permit a moderate orderly decline in the sol before utilizing the credit for exchange advances for imports. The Minister expressed the hope that if it should not be so utilized, some arrangement might be made to apply the credit to the development of economic measures which would create additional exchange for its repayment.
Apparently the Minister now foresees the possibility that the fund may not be wholly required for the purpose for which it was originally granted and desires to use it for the development of new enterprises which he believes will be productive of export commodities which in turn will increase the volume of foreign exchange. The [Page 1141] Minister particularly mentioned an increase in gold production. If he has in mind the purchase of American [products?] for these purposes it would appear that such procedure would be covered by the terms of the credit.
No notice of the credit has appeared in the local press nor has the Government made any announcement.
The Minister said that he would immediately designate the personnel to make studies of the projects he has in connection with his long term cooperative program.
Report of conversation going forward tomorrow by air mail despatch No. 157.10
  1. Not printed.