Prepayment of IMF loan
The Central Bank of Iceland has decided to prepay a portion of the financing from the International Monetary Fund (IMF) in connection with the Stand-By Arrangement concluded between the Fund and the Icelandic authorities. With this payment, the authorities have repaid 83% of the IMF financing. The prepayment amounts to about 50 b.kr. (SDR 275 million) on payments maturing in 2015. The total amount of funding from the IMF was 253 b.kr. (SDR 1,400 million). Following this payment, the outstanding balance of the IMF financing will amount to approximately 43 b.kr. (SDR 237 million).
The decision to prepay is a debt management exercise to reduce short-term debt. It was taken in view of the Central Bank’s relatively abundant liquidity position, which stems in part from intervention in the domestic foreign exchange market. The financing in question was on the balance sheet of the Central Bank, therefore this prepayment will affect Central Bank debt but not Treasury debt. The Bank’s foreign exchange reserves will decline by the amount of the payment. At the end of November, the foreign exchange reserves totalled 566 b.kr.
Further information can be obtained from Már Guðmundsson, Governor of the Central Bank of Iceland, at tel: +354 569-9600.
No. 45/2014
19 December 2014