BUSINESS

Costly IMF loans to be repaid on Tuesday

EIRINI CHRYSOLORA

Finance Minister Christos Staikouras requested the ESM’s approval for the IMF loan repayment in September.

TAGS: Finance

The early repayment of the expensive part of the International Monetary Fund loans to Greece is to be completed on Tuesday.

The Public Debt Management Agency gave the order on Monday for the payment of 2.7 billion euros from the state’s accounts and this will be credited to the recipient countries’ accounts on Tuesday. This amount, which bore an interest of 4.91 percent, covers all the tranches Greece would have had to pay in 2020 and half of those due in January 2021.

It is also possible that another section of the loans will be repaid within 2020, amounting to 2 billion euros and concerning 2021 payments. However, it should be noted that this will only happen under certain conditions, such as the maintenance of Greece’s borrowing costs at low levels.

The Finance Ministry announced on Monday that after the submission by Minister Christos Staikouras to the European Stability Mechanism on September 16, the Greek state is set to save 70 million euros thanks to this early repayment. The ESM approved this move on October 28, but reduced its benefit estimate to just 33 million euros. It also made it clear that the 2.7 billion will be paid from this year’s bond sales and not from the cash buffer.

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