Greece seeks early repayment of €10bn IMF loan

15 April 2019, 14:15 | Updated: 15 April 2019, 22:46

The Greek government says is negotiating to repay its debts to the International Monetary Fund (IMF) early, as market borrowing rates have fallen to their lowest level since 2005.

Greek government spokesman Dimitris Tzanakopoulos said on Monday that his country is hoping to repay a "significant portion" of its remaining €9.6bn (£8.3bn) owed to the IMF, ahead of schedule.

He spoke after a meeting in Washington between Greek finance minister Euclid Tsakalotos and IMF managing director Christine Lagarde.

The request to pay off the loan early comes a month after the IMF reported that Greece had now entered a period of economic growth "that puts it among the top performers in the eurozone".

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

"Growth is projected to reach 2.4% this year (up from an estimated 2.1% in 2018) supported by exports, private consumption and investment as sentiment improves."

The yield on Greece's 10-year bond dropped further to 3.28% Monday, to levels not seen in 14 years.

Greece will need approval from the European bailout lenders in order to repay its IMF loans early, but top officials in the agency and the European Commission are said to have signalled backing for the idea.

The left-wing government in Greece - facing national municipal and European elections this year - is planning to boost funding for social programs with the money eventually saved from the cheaper loan repayment, Mr Tzanakopoulos said.

"The IMF loans are expensive, with an interest rate of 5.1% - so that means we can lower debt servicing costs and we will have an increase in the fiscal space to help vulnerable groups in society," he said on Greek radio.

According to Reuters, Greece plans to file a request this week seeking the eurozone bailout fund's consent to the early repayment of expensive loans owed to the International Monetary Fund.

Greece wants to repay about €3.7bn (£3.2bn) in IMF loans, Reuters said.

The country emerged from its third international bailout program last August and has seen significant improvements in an economy battered by years of recession and budget cuts.

Improvements in Greece's bond yields have been accompanied by a boost to the stock market, which on Monday closed up 26.1% on the year.