Iceland treasury and central bank pay back ISK 116 billion on IMF loan

The Icelandic state treasury and the Central Bank of Iceland have repaid ISK 116 billion on loans from the IMF and the Nordic countries this month.

The money constitutes a prepayment amounting to ISK 55.6 billion (EUR 332.7 million) to the IMF and ISK 60.5 billion (EUR 362 million) to the Nordic countries. The information was published in a statement from the Central Bank.

“Today’s actions constitute a short-term payment on loans which will reduce the cost of foreign currency reserves,” the statement says. “The decision behind the reimbursement is based on the comparatively strong liquidity of the Treasury and Central Bank in the coming months.”

The original loan from the IMF and the Nordic countries was EUR 3.4 billion; which is around ISK 564 billion at today’s rate, Vísir.is reports.

The statement reiterates that the payment does not impact the state’s total debt level; bit that the total treasury debt is going down by 3.4 percent gross against GDP. The foreign debt of Iceland goes down by 6.6 percent of gross GDP with the payments, but the net debt position remains unchanged.