Greece on Thursday proceeded with another early payment of a portion of bailout loans extended to the country by the International Monetary Fund (IMF).
The early payment came after Athens received a “green light” by its institutional European creditors, with the procedure commenced by the finance ministry on Feb. 8, 2021.
Greece will pre-pay 1.5 billion euros of the outstanding loan this year with the remainder of a 3.3-billion-euro loan covered by Dec. 2, 2022 – before the loan matures.
The early payment of an IMF loan is the second time that the current conservative Greek government has taken such a step, with the twin goal being to continue to consolidate the country’s image as a solid sovereign borrower and to further push down yields, as well as to best exploit cash reserves now held by Athens.
Currently, Greece has paid back roughly 75 percent of eight billion euros in loans from the IMF received up until the summer of 2019 – a scenario that a few years ago would have been considered as remote or improbable.
Early repayment of outstanding IMF loans also improves the external debt’s sustainability and risk of refinancing.