Peruvian debt forgiven

Treasurer Bill English announced today that a long-standing debt of $14 million owed by Peru had been forgiven.

A letter from Mr English to the Peruvian Minister of Economics and Finance was delivered by Trade Minister Lockwood Smith during his visit to Peru this week.

"The debt is the outstanding amount of principal and unpaid interest from loans made in the early 1970s to finance the sale of dairy product to Peru.

"It is the only sovereign loan owing to New Zealand and has already been written off in the Crown Accounts.

"The Government decided that, building on the recent successful visit of the Prime Minister to Peru, it was appropriate to forgive the debt in recognition of Peru's successful economic reform programme and the interests the two countries share in furthering international trade liberalisation," said Mr English.