Portugal has already payed 60% of what it owes the IMF with the new July reimbursement

  • ECO News
  • 27 July 2017

The Portuguese Debt Management Agency (IGCP) has reimbursed the IMF another 1,750 million euros in July, which means Portugal has already payed 60% of what it owes tho that creditor.

The Portuguese Debt Management Agency (IGCP) has “reimbursed part of the IMF loan in June and July for an amount of SDR 810 million [around 1,000 million euros] and SDR 1,447 million [1,750 million euros], respectively”, the agency headed by Cristina Casalinho disclosed in the institution’s monthly bulletin.

These repayments correspond to the capital amortization which were to “originally fall between June 2019 and March 2020”, states IGCP, adding that with there reimbursements, Portugal has already paid 60% of the total IMF loan.

The June reimbursement had already been announced by the Finance Ministry, when it had already stated that by the end of August, Portugal intended to make an early reimbursement of over 2.600 million euros to the IMF, anticipating the amortization of the loan which were to take place until April 2020. With the July 24 reimbursement of around 1,750 million euros announced by IGCP, the Treasury should make an early repayment of around 850 million euros until August.

According to the IGCP’s Monthly Bulletin, Portugal is currently paying a 4.4% interest rate on the credit granted by IMF left to be paid and the average maturity to pay this debt reimbursement is 6.2 years. These interests charged by the Fund are far higher than the rate Portugal is paying for the ten-year debt securities, of around 3%, which means these early reimbursements to IMF will generate savings in the costs of the Portuguese public debt.

Since Portugal started returning part of the credit to IMF before its maturity, in 2015, over 16,000 million euros have been reimbursed out of the 26,000 million euros the institution headed by Christine Lagarde granted the country within the 2011 bailout.