Greece was Forced to Raid its Reserves to Make IMF Payment

Greece was forced to tap into an emergency account to make a debt interest payment to the International Monetary Fund (IMF), it has emerged.

The government raided its reserves to make the €750m (£538m) payment on Monday, one day ahead of the deadline.

It comes after Greek finance minister Yanis Varoufakis warned his country was weeks from running out of cash.

Greece is believed to have borrowed €650m from its IMF holding account to meet the debt interest payment.

Member countries have two accounts with the IMF – one where they deposit their annual quota, in effect their membership fee, and another where they store reserves, including gold, for emergencies.

Country quotas are based on each country’s relative size in the world economy.

One Greek official told Reuters on Tuesday that the reserves that the government used must be replenished in the IMF account in “several weeks”.

Greece also used €100m of its cash reserves to make the full payment on its IMF bailout loan interest, the official said.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza