LIMA -- Peru's central bank may cut reserve requirements for bank deposits to give the Andean country's banks more liquidity as international loans become costlier, bank President Julio Velarde said Friday.

The central bank last week eliminated reserve requirements for international bank loans for terms longer than two years, giving banks $100 million in additional liquidity. Reserve requirements may be lowered more, Velarde said in an interview.

''More than a restriction in credit, loans are becoming more expensive,'' Velarde said. ``We're alert to any sign of a liquidity squeeze and we're . . . to be able to act quickly.''

The central bank has built up a record $35 billion in international reserves, while the country's banks have $15 billion in deposits to shield Peru from the effects of the U.S. financial crisis.

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