Ireland is to repay International Monetary Fund bailout loans early

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Ireland is to repay International Monetary Fund bailout loans early

The Finance Minister has announced that Ireland is going to pay back the rest of its bailout loan early.

"The nature of the loans varied and the negotiated rate with the British government was similar to a fixed rate mortgage, there was a certain rate and there was a break clause in it", Donohoe told reporters.

The early repayments which will reportedly save the Government around €150m in the long run comes as the Government have made a decision to take advantage of current interest rates which are more favourable now than in the future.

The Government has averted a €200 million penalty by deciding not to repay its United Kingdom bailout loans early, as it moves ahead with plans to refinance its remaining International Monetary Fund debt as well as bilateral borrowings from Denmark and Sweden.

Ireland received 22.5 billion euros ($27 billion) from the IMF in 2010 as part of a 67.5-billion-euro EU-IMF financial assistance programme which helped the country recover after the financial crash.

His statement continued: "Actions taken in recent years, and the sacrifices made by our citizens, have laid the foundations for a solid and sustained economic recovery in Ireland".

"On the basis of 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 department said.

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

"The Exchequer is in a healthy funding position", Frank O'Connor, NTMA's director of funding and debt management said. "At the end of August we had €20bn in cash and liquid assets".

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