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Early repayment of IMF loans announced
Taoiseach Leo Varadkar and Minister Donohoe speaking to the media today
Finance Minister Paschal Donohoe together with Taoiseach Leo Varadkar today announced the intention to repay early, and in full, the outstanding programme-related IMF debt (circa €4.5bn), and the bilateral loans from both Sweden, (€0.6bn), and Denmark, (€0.4bn); this amounts to a total of circa €5.5bn.
Following NTMA advice and Departmental analysis, the Minister intends to proceed with these early repayments which have the potential to generate considerable interest savings, improve Ireland’s debt sustainability, provide liquidity benefits and increase the ECB’s purchase capacity for Irish government bonds in its quantitative easing programme.
The NTMA has advised that the interest savings to the Exchequer from these early repayments are estimated to be of the order of €150m over the remaining life of the loans.
Speaking to the media today, Minister Donohoe said:
Ireland greatly appreciates the support and assistance from the IMF and our European partners, which was provided at a time of great uncertainty for our country and which was key to our path to recovery. Their support, friendship and solidarity will not be forgotten.
At end-August the Exchequer had €20 billion in cash and liquid assets. The next NTMA bond auction is scheduled for Thursday 14 September and thereafter the Agency will announce its Q4 2017 funding plan on 2 October.
Early repayment of the loans will require agreement from our European lenders to waive the proportionate early repayment clauses in our respective loan agreements. Formal discussions will now begin with our EU partners to seek the necessary waivers.
Read the full press release here.