PE–1. Editorial Note
In a letter of January 27, 1958, to Per Jacobsson, Managing Director of the International Monetary Fund, Peruvian Minister of Finance and Commerce Augusto Thorndike proposed a $25 million standby arrangement. The Embassy in Peru transmitted a copy of this letter under cover of despatch 551 from Lima, January 29. (832.13/1–2958) The standby arrangement which Peru entered with the Fund in the amount of $25 million for the period February 10, 1958–February 28, 1959, doubled the dollar amount of the previous standby arrangement. For further information, see International Monetary Fund, Annual Report or the Executive Directors for the Fiscal Year Ended April 30, 1958 (Washington, 1958), pages 27 (table) and 73. Upon expiration of this arrangement, the Fund entered into a new standby arrangement with Peru for 13 million for one year beginning March 1, 1959. For further information, see International Monetary Fund, Annual Report of the Executive Directors for the Fiscal Year Ended April 30, 1959 (Washington, 1959), page 25 (table). The Fund increased its standby arrangement with Peru to $27.5 million for the period March 1, 1960–February 28, 1961. For further information, see International Monetary Fund, Annual Report of the Executive Directors for the Year Ended April 30, 1960 (Washington, 1960), page 23 (table).
On February 7, 1958, Acting Secretary of the Treasury Julian B. Baird and Peruvian Ambassador Fernando Berckemeyer had signed a one-year exchange agreement effective February 17 in the amount of $17.5 million. This agreement enabled Peru to request the United States Stabilization Fund to buy Peruvian sales, if necessary for maintaining orderly exchange conditions on the certificate market, at realistic rates, between the Peruvian sol and the United States dollar. Under terms of the agreement, Peru would subsequently repurchase the soles for dollars. Assistant Secretary of the Treasury Tom B. Caughran sent copies of the exchange agreement to the Secretary of the Treasury under cover of a letter of April 21. (823.131/4–2158) On February 27, 1959, this agreement was extended for one year effective March 1. Assistant Secretary of the Treasury T. Graydon Upton sent [Typeset Page 1024] a copy of the exchange agreement extension to the Secretary of State under cover of a letter of April 15, 1959. (611.2392/4–1559)
[Facsimile Page 2]In a letter of February 7, 1958, to Acting Secretary of the Treasury Baird, Ambassador Berckemeyer stated that the Banco Central de Reserva del Perú had entered into $17.5 million in credit arrangements for stabilization purposes with private United States banks. (823.131/4–2158) Ambassador Berckemeyer informed Assistant Secretary of the Treasury Baird in a letter of February 27, 1959, that the Peruvian Central Reserve Bank had renewed these stabilization credit arrangements. (611.2392/4–1559)
On August 27, 1958, the Export-Import Bank of Washington authorized a credit of $40 million to the Central Reserve Bank of Peru for financing essential imports. Peru used and repaid $15.5 million of this loan. For further information, see Export-Import Bank of Washington, Report to the Congress for the Twelve Months Ending June 30, 1960 (Washington, 1960), page 118. Even after repaying this balance of payments support loan, the Central Bank was able to maintain its reserves because of increasing exports. As a result of the strengthened financial position of Peru, its monetary authorities on May 16, 1960, unified Peru’s two exchange systems by suspending the exchange certificate system which had been in existence for 10 years. For further information, see International Monetary Fund, Annual Report of the Executive Directors for the Fiscal Year Ended April 30, 1960, pages 118–120.