Peru International Reserves amounted to $30.14 billion by March 25

Peru’s Net International Reserves (NIR) totaled 30.14 billion dollars by March 25, 734 million more than February’s closing, the Peruvian Central Reserve Bank (BCR) reported today.

BCR said the level of reserves have recovered in the course of this month, surpassing again the 30 billion dollars.

It pointed out this reserves level is equivalent to 13 months of imports, 4.8 times the initial issue amount, and 1.6 times the foreign public debt.

Regarding BCR’s exchange position, it was 20.45 billion dollars by March 25, which represents 629 million more than figure registered at the end of February.

Between March 17 and 24, the daily average of the corporate interest rate, on 90-day term, decreased from 6.89 to 6.69 percent in the domestic currency, while this rate in dollars dropped from 3.18 to 3.01 percent.

So far in March, the daily average of interbank interest rate in national currency has been 6.09 percent, lower than February’s average (6.44 percent).

On March 24, the interbank interest rate in domestic currency was 6.06 percent. (Andina)

Central bank officials: Latin America in better conditions to face financial crisis

Latin America is in better conditions to face the international financial crisis, officials of central banks of the region said Tuesday.

The conclusion was reached at a seminar titled "The global financial crisis: Answer from the central bank in the western hemisphere" held in Lima, the Peruvian capital, said Peru's Central Bank of Reserves as quoted by Xinhua news agency.

Officials from central banks of Latin America discussed the impacts of the financial crisis and they considered that Latin America was in better conditions to face it, the bank said.

The participants shared the experiences of Latin American countries, and discussed the challenges brought by the crisis, said Julio Velarde, chief of Peru's central bank.

The seminary, organized by the Peruvian central bank and the International Monetary Fund (IMF), was also attended by officials from the central banks of Argentina, Brazil, Mexico, Canada, Chile, Uruguay and Colombia, as well as the European Central Bank and international financial institutions.

Velarde said that the crisis demanded different actions and central banks in the world have taken actions of monetary policies to tackle the crisis.

Gilbert Terrier, the representative from the IMF, also said that Latin America was in a better position to face the crisis due to different factors.

The financial system in the region barely had toxic assets, its external and public debts had been reduced over the last year, he said.

"The response from Latin America has been very fast with injections to the liquidity," Terrier added. (Andina)

Korean companies plan important investments in Peru

The general director of the Korea Trade-Investment Promotion Agency (Kotra) in Peru, Jong Geun Park, said that more than ten South Korea-based companies will announce an aggressive investment plan in Peru during September this year.

Geun Park explained that South Korean investors are interested in bringing their capitals to Peru because of the country's legal conditions and economic stability.

"We are interested in investing in the energy, mining, water and sanitation sectors, which concentrate a large amount of investment," Geun told Andina agency.

He commented that while the Korean telecom companies have planned to earmark 1 billion dollars until 2011 to develop projects in Peru, the largest amounts are in the energy and mining industries.

"In addition, there are hotel companies that are keen to invest in beach resorts in northern Peru over the next two years," Geun said.

In that sense, he said that Kotra is working with these investors to channel projects, both public and private, that might interest them.

"While the global crisis is hitting some of Korean exports, we must clarify that this situation will not affect our investments in different countries because we are a big and sound country," he said.

Kotra held last week in the Lima Peru and Korea Industries Cooperation Forum, where 74 Korean entrepreneurs and officials participated. (Andina)

CAN members trade up 22% to US$ 7.17 bln in 2008

The trade among the member countries of the Andean Community of Nations (CAN) reached a record 7.17 billion U.S. dollars in 2008, up 22 percent over the previous year when intra-community exports totaled 5.85 billion.

Similarly, CAN exports to third markets also registered a remarkable 22 percent growth in 2008, to reach 85.97 billion dollars compared to 70.44 billion in 2007.

Peru registered the highest growth last year going from 1.21 billion dollars in 2007 to $1.55 billion in 2008 (28 percent rise), followed by Colombia which jumped from 2.14 billion dollars to $2.69 billion (26 percent increase).

Regarding Bolivia, its intra-community exports rose from 395 million dollars in 2007 to $ 464 million in 2008 (18 percent more) and Ecuador, which increased from 2.10 billion dollars to $2.45 billion (17 percent jump).

However, the CAN said the countries contributing significantly to the intra-community trade are Ecuador and Colombia with 38 and 34 percent, respectively.

Peru's participation in this trade is 22 percent and Bolivia’s is six percent. (Andina)

Peru-China FTA may be signed by mid-April

Peruvian Foreign Minister Jose Antonio Garcia Belaunde said Peru may conclude a free trade agreement (FTA) with China as early as mid-April this year, adding that the signing ceremony will take place in the Asian country and would be attended by President Alan Garcia.

In turn, Peruvian Trade Minister Mercedes Araoz has recently said that Peru and China were about to complete the legal review process of the FTA text, which began last month.

It is worth noting that the conclusion of free trade talks between both countries was announced in November last year, during the Asia Pacific Economic Cooperation (APEC) Leaders’ Meeting, held in Lima.

Despite the impact of the financial crisis, Peru and China enjoyed the world's highest economic expansion in 2008, with growth rates of 9.84% and 9%, respectively.

Garcia Belaunde also announced that with the aim of strengthening bilateral relations President Alan Garcia will visit Acre in northwest Brazil to meet with his Brazilian counterpart, Luiz Inácio Lula da Silva, in late April.

Garcia Belaunde mentioned that the Foreign Ministry’s goals until 2011, when Alan Garcia’s administration ends, are to reach free trade pacts with the European Union and Japan, develop President Garcia's Pacific Arc proposal, and broad ties with Persian Gulf countries. (Andina)

Photo: Peruvian Foreign Minister, Jose Antonio Garcia Belaunde. Photo.ANDINA / Norman Cordova

WOLA: Peru’s impressive growth helps reduce poverty

Peru’s "impressive" economic growth places the Andean country in a strong position in the Latin America region because it has the possibility to reduce poverty levels significantly, said Washington Office for Latin America (WOLA) observer Jo-Marie Burt.

She said that the international community acknowledges Peru’s significant growth, though she mentioned that this economic expansion must go along with other obligations relating to social and human rights issues.

"Peru’s economic growth rate is impressive and the whole world has noticed this. It has also noticed that Peru is in a leading position in Latin America to meet goals such as ending poverty and inequality," she told Andina.

The WOLA observer noted that Peru’s economic expansion, which in 2008 reached 9.84 percent, will allow Peru to overcome the exclusion of various social groups, as long as it implements targeted programs.

"As a result of this growth, the resources obtained by the State should be directed to financing social programs, and especially those relating to education, whose levels are the lowest in Latin America," she suggested. (Andina)

Photo: Washington Office for Latin America (WOLA) observer Jo-Marie Burt

China hopes to maintain $6 bln trade exchange with Peru this year

China hopes to maintain 6 billion dollars trade exchange with Peru this year, in order words, to reach a similar level to that achieved last year despite the international financial crisis, Chinese ambassador to Peru, Gao Zhengyue, said.

"We hope that the global crisis does not dramatically affect the commercial exchange between both countries, and that the exports and imports volume reach 6 billion dollars as it was last year," he told Andina news agency.

Zhengyue said that the economic turmoil affects everybody and no country can escape from its impact, hence it is necessary that nations to further strengthen their trade relations.

In this regard, he noted that Peru and China achieved to complete last year the negotiations of the bilateral Free Trade Agreement (FTA), which will be crucial for both nations to face the effects of the crisis.

"This trade agreement is convenient for both countries, Peru is a very important trading partner for China and vice versa. We are confident that the bilateral FTA will help us to strengthen further cooperation ties," Zhengyue said.

He noted that when this agreement comes into force, which is estimated to be in 2010, will boost a considerable growth of the bilateral trade volume. (Andina)

Photo: Chinese ambassador to Peru, Gao Zhengyue. Photo: ANDINA / Carolina Urra

Peru regarded as investment-friendly country by world's mining entrepreneurs

World's mining entrepreneurs attending the international conference “Prospectors and Developers Association of Canada” (PDAC) regard Peru as an investment-friendly country.

"Investors’ perception is to continue investing but to be more selective in terms of countries, and at the moment Peru is a great opportunity for investment," he said.

Sanchez said the global crisis has had an impact on the development of the PDAC’s international convention because attending entrepreneurs are less than in previous years, but the participating companies maintain the interest in developing projects in various parts of the world.

"Here, in Canada, people are very concerned about the crisis, but what is clear is that Peru is doing a great job in that aspect," he said.

In this regard, Sanchez noted that those attending the international mining event recognize Peru’s leadership on economic issues and that will be taken into account when they make decisions about their investment projects.

"So, although there is a complicated economic situation worldwide, investments will continue going to Peru," said the minister who is participating in the convention in Canada. (Andina)

Peru's coffee exports grew 42% in January 2009

Peruvian coffee exports in January, the first month of Peru's 2009 calendar-based production year, were up 42% to 179,658 bags, the producer-run Peruvian Coffee Board, or JNC, said Wednesday.

Releasing the first preliminary figures for the year, this compares with January exports last year of 126,832 bags, the JNC said in the report, a copy of which was obtained by Dow Jones Newswires.

The figures are in line with industry forecasts for Peruvian coffee exports to reach about 300,000 bags during the first quarter of 2009, as leftover supply from the 2008 bumper crop is running out.

Peru's coffee exports in 2008 rose 30% to 3,732,567 bags, from exports in 2007 of 2,876,322 bags, the JNC said last month. Peru's domestic consumption is estimated at between 200,000 bags and 250,000 bags.

But total Peruvian coffee production in calendar year 2009 is expected to fall 20% to 3.335 million bags, as trees recover from the 2008 harvest of 4,178,333 bags, which was the second highest output in Peru's coffee history.

Physical harvesting of Peru's coffee crop starts in the second half of March, six months before the main mild washed arabica coffee crop in the rest of Latin America, and exports from the new crop start reaching the market in late April or May.

Peru has become an increasingly important producer of high-quality washed arabica coffee in recent years, more than doubling production from about 1.7 million bags in the mid-1990s to between 3.5 million and 4.0 million bags currently.

It competes with Honduras and Guatemala to be the second-largest exporter of washed arabica beans in Latin America after Colombia. (Andina)