UPDATE 1-Portugal repays IMF bailout loans in full ahead of time

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LISBON, Dec 10 (Reuters) - Portugal paid back the remaining 4.7 billion euros of bailout loans to the International Monetary Fund on Monday, eliminating its debt to the creditor after a series of early repayments, Finance Minister Mario Centeno said.

The reimbursements, which began in 2015, have enabled the country to save a cumulative 1.16 billion euros in interest payments over the past two years, he told reporters.

“This operation is of enormous importance for the sustainability of public accounts,” Centeno said.

The original repayment schedule of the 26 billion-euro loan had envisaged the last repayment to the Fund coming in 2024.

At the height of the European debt crisis in 2011, the European Union and the IMF agreed a 78 billion-euro rescue package for the Iberian country, with the Fund providing one-third of the sum, ultimately at a higher interest rate than the European part.

After painful austerity measures dictated by the terms of the bailout and a deep three-year recession, Portugal returned to growth in 2014 and last year churned out its strongest economic expansion since 2000, while its budget deficit and debt fell.

With its public finances on a sounder footing and helped by the European Central Bank’s quantitative easing programme, Portugal’s bond yields have fallen sharply, allowing it to borrow at much lower rates than those charged on most of the bailout loans, especially the IMF part. (Reporting by Sergio Goncalves and Andrei Khalip, editing by Ed Osmond)