Greece has asked its European creditors to approve the early repayment of part of its bailout loans from the International Monetary Fund, the country's finance minister said Monday.
Christos Staikouras said paying off the IMF loans ahead of schedule would reduce debt servicing costs by about 70 million euros ($77 million). He said the average annual interest rate of the IMF loans is 4.9%, while the country can currently borrow raise money much cheaper in the markets — the interest rate on Greece's 10-year bonds is around 1.6%.
Although the loans are owed to the IMF, European creditors — to whom the country owes far more — must sign off first on the request under the terms of Greece's bailouts.
Prime Minister Kyriakos Mitsotakis said the early repayment, for which both the IMF and European creditors have voiced support, will ``boost the country's credibility'' while improving the viability of its huge debt burden.
Between 2010-2018, Greece received (euro) 290 billion ($320 billion) to keep afloat because of the perilous state of its public finances.
Greece has repaid a large part of its IMF loans but still owes the fund about 9 billion euros. The average interest that Greece pays its European creditors is around 1.4%.