Courtesy of Mish.
Greece said it would make its payment to the IMF on time and it did, one day early in fact. How? Greece Taps IMF Reserve Account.
Greece emptied an IMF holding account to repay 750 million euros ($840 million) due to the fund, a Greek central bank official said, avoiding default but underscoring the dire state of the country's finances.
Greece, like all other International Monetary Fund members, holds reserves from the IMF that are denominated in Special Drawing Rights (SDR), a basket of international currencies. The reserves must be kept at a certain level or the country must pay interest if its holdings fall below its "allocation" of SDRs from the IMF.
A government official told Reuters that Athens used about 650 million euros from the SDR holdings account and 100 million euros from its cash reserves to make the payment on Monday.
The Greek central bank official confirmed the account had been tapped after government officials met the central bank chief last week to figure out how to make the payment.
As of the end of March, Greece had about 554 million SDRs, equivalent to 695 million euros, according to IMF data.
The last time Greece made a significant withdrawal from its SDR holdings was in November 2011.
Made a day early, the IMF payment calmed immediate fears of a Greek default, but Finance Minister Yanis Varoufakis said on Monday the liquidity situation was "terribly urgent" and a deal to release further funds was needed in the next couple of weeks.
"The central bank governor put forth the idea to tap the 650 million euros in the holding account, which needed IMF approval," the official said, declining to be named.
"Governor Stournaras made the arrangement with the IMF and on Saturday we got their okay and the account was unlocked."
Going, Going, Gone
Here are a few additional details from the Financial Times.
Asked whether Greece’s decision to tap its IMF funds was a cause for alarm, Valdis Dombrovskis, the European Commission vice-president in charge of eurozone policy, said: “It’s for the experts to look into the issue before I can comment.”
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