• by IPS Correspondents (lima)
• Tuesday, November 08, 1994
• Inter Press Service

LIMA, Nov 08 (IPS) - Peruvian Ministerial Advisor Fritz Du Bois said his country expected the private banksto which the government owes 6.6 billion dollarsto accept a Brady Plan similar to the one negotiated by Poland.

Du Bois explained that the terms granted to Poland include a 45 percent discount on bonds, the highest percentage yet granted to a debtor nation.

The Polish Brady Plan also included a restructuring of its principal debt with bonds payable in the final year of the agreement and an exchange of debt conversion bonds for capital to be used in the privatisation process.

Despite the creditor banks' apparent hardening in attitude, analysts consider the door to a negotiated solution to be open since the government overturned a parliamentary veto on the repayment of a 65 million dollar debt to the Chemical and American Express Banks of New York.

Repayment of the debt was contested by Parliament this year because of irregularities in the credit, granted in 1983 for the purchase of two ships that later proved to be unusable.

At a meeting in Madrid, the creditor banks told the Peruvian government that, apart from settling this debt, it would also have to assume the Peruvian Banco Popular debts contracted with a U.S. bank prior to its nationalisation some years back.

Negotiators continue to discuss acceptable repayment formulas, with Du Bois stressing that Peru will not consider buying back its debt, despite the Central Bank's hard currency reserves of over six billion dollars, because of high market rates - at 55 percent on Nov. 4.

It also seems that President Alberto Fujimori is giving negotiations with the creditor banks a low profile until after the planned general elections next April.

© Inter Press Service (2014) — All Rights Reserved. Original source: Inter Press Service

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