Ireland set to repay first tranche of €9 billion to IMF next month

The Government expects to repay €9 billion of the State’s loans with the International Monetary Fund (IMF) in December, in what will be the first instalment of the early repayment of our bailout funds from the Washington DC-based body.

This has been confirmed by Minister for Finance Michael Noonan in a reply to a question from Fianna Fáil’s finance spokesman Michael McGrath.

“The early repayment [of the IMF loans] will take place in tranches, with the first tranche of approximately €9 billion planned for next month,” Mr Noonan said.

It is understood this money will be paid from existing cash balances held by the National Treasury Management Agency on behalf of the State.

Ireland intends to repay €18.3 billion of our €22.5 billion IMF loan, which dates back to the financial assistance programme agreed with the fund and the EU in late 2010.

Mr Noonan said this is the portion of the loan subject to the highest rate of interest. The intention was to replace it, in a “measured way”, with “less expensive market funding”.

A clause in our loan agreements with the European Financial Stability Facility (EFSF), the European Financial Stabilisation Mechanism (EFSM), and with bilateral lenders the UK, Denmark and Sweden meant that waivers from them were required to repay the IMF loans early.

“All bilateral lenders have now confirmed the waiver in respect of their loans to us, in accordance with their national approval procedures,” Mr Noonan said.

“The most recent of these was the Swedish government’s agreement on November 20th ... following the Swedish parliament’s approval the previous day. The EFSF and EFSM can now complete the waiver process, which will facilitate the first early repayment.”