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Latvia completely repays IMF loan

Photo: Ieva Čika/LETA.
 RIGA, Dec 21 - On Thursday, the State Treasury completely repaid the remainder of the loan from the International Monetary Fund (IMF) - LVL 493.3 million, the Finance Ministry informed the business information portal ''Nozare.lv''.
''Taking out the loan at the most suitable time, and repaying the expensive short-term loan in full, we have optimized our interest rate repayments for the next several years. Thus, we will be able to divert funds to areas where these funds are needed the most, and not worry about repaying this loan,'' Finance Minister Andris Vilks (Unity) said.
Latvia has fulfilled all of its obligations to the IMF.
As reported, Latvia earlier this month reached agreement with the IMF on the repayment of the entire loan borrowed from the IMF before term - already this year. Latvia borrowed a total of LVL 820.2 million from the IMF as part of the international loan program for Latvia.
Early repayment of the other parts of the international loan program is not planned. Repaying the loan to the European Commission before term is impossible as there is no early repayment provision in Latvia's agreement with the Commission, whereas repaying the World Bank's loan before deadline would be accompanied with disproportionate penalties, therefore repaying the loan before term would be financially disadvantageous.
Latvia is to begin repaying the loan to the European Commission in 2014, when Latvia will return LVL 702.8 million to the Commission, followed by LVL 843.4 million in 2015, LVL 351.4 million in 2019 and LVL 140.6 million in 2025.
Also, Latvia must repay the World Bank a total of LVL 281.1 million from 2015 to 2020.
The total amount of the international loan program was EUR 7.5 billion (LVL 5.25 billion). Nevertheless, Latvia got by with EUR 4.5 billion (LVL 3.16 billion).

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