Wednesday, June 26, 2019
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Greece requests early repayment of an IMF loan of EUR 10 billion | Business news

The Greek government claims to be negotiating early repayment of its debt to the International Monetary Fund (IMF) as market interest rates have fallen to its lowest level since 2005.

Greek government spokesman Dimitris Tzanakopoulos said on Monday that his country hopes to repay a "significant portion" of its remaining EUR 9.6 billion (GBP 8.3 billion) owed to the IMF.

He spoke after a meeting in Washington between the Greek Minister of Finance Euclid Tsakalotos and the IMF managing director Christine Lagarde.

The call to repay the loan prematurely comes one month after the IMF reported that Greece had entered a period of economic growth "that makes it one of the top performers in the Eurozone".

The IMF said in its report: "The economic recovery in Greece is accelerating and widening.

"Growth is expected to reach 2.4% this year (compared to an estimated 2.1% in 2018), supported by exports, consumer spending and investment as sentiment improves."

Greece's 10-year bond yield fell further to 3.28% on Monday, a level that has not been seen for 14 years.

Greece will need the approval of European rescue creditors to repay its IMF loans ahead of schedule. However, it is said that high-ranking officials from the Agency and the European Commission have agreed to the idea.

The Greek left-leaning government, which faces national municipal and European elections this year, plans to increase funding for social programs, with the money eventually being saved from the more favorable loan repayment, Tzanakopoulos said.

"The IMF's loans are expensive at 5.1%, which means that we can reduce the cost of debt service and increase the fiscal space to help disadvantaged groups in society," he said on Greek radio ,

According to Reuters, Greece is planning a request this week from the eurozone bailout fund for the early repayment of expensive loans to the International Monetary Fund.

According to Reuters, Greece plans to repay IMF loans amounting to around EUR 3.7 billion.

The country emerged from its third international rescue program last August and has seen significant improvements in an economy plagued by recessions and budget cuts.

The improvement in Greece's bond yields was accompanied by a stock market upswing, which gained 26.1% on Monday.

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