Ireland is to repay IMF bailout loans early

The Government says this could save €150m in interest

Ireland is to repay IMF bailout loans early

The International Monetary Fund headquarters is seen in Washington in 2010 | Image: Cliff Owen / AP/Press Association Images

Ireland is to repay the remainder of its bailout loans early to the International Monetary Fund (IMF), Denmark and Sweden.

Finance Minister Paschal Donohoe says he spoke to IMF chief Christine Lagarde on Thursday morning, who approved the deal.

Overall this will see Ireland repay a total of around €5.5bn.

This is made up of remaining loans from the IMF (some €4.5bn), Sweden (€0.6bn) and Denmark (€0.4bn).

The National Treasury Management Agency (NTMA) estimates that interest savings for the Irish exchequer from the early repayment of these loans could be of the order of €150m over the remaining lifetime of the loans.

The director of funding and debt management with the NTMA, Frank O’Connor, says: "Replacing Ireland’s loans from the IMF, Sweden and Denmark further reduces our debt service costs, which have declined considerably in recent years.

"This is not the first time Ireland has made an early repayment of programme loans.

"The NTMA has previously implemented arrangements to repay over €18bn in IMF facilities to take advantage of reduced market borrowing costs and create savings for the exchequer.

"The exchequer is in a healthy funding position. At end-August we had €20bn in cash and liquid assets".

The NTMA’s next bond auction is scheduled for Thursday September 14th.

Additional reporting: Chris Donoghue