LISBON (Reuters) - Portugal will start repaying its bailout loans from the IMF next month, giving back 6 billion euros ($6.72 billion), Finance Minister Maria Luis Albuquerque said late on Friday.
The European Union has given Lisbon approval to make 14 billion euros in repayments on its loans.
Albuquerque said the country will accelerate repayment of its remaining debts to take advantage of record low yields on Portuguese government bonds, which are now far below the interest it has to pay the Fund.
“When we’ve repaid the 14 billion euros, we will tell our European partners that we are now in a condition to reimburse the rest to be able to enjoy savings on interest in full,” she said in televised remarks.
At the yields the country can now get by issuing new bonds, it is worth paying off the IMF debt which has an interest rate of around 3.5 percent. Portugal issued 10-year bonds at just over 2 percent on Wednesday and the yield has since fallen to around 1.8 percent in the secondary market.
The IMF provided one-third of the loans made under the 78 billion euro rescue program which Portugal accepted during a debt crisis in 2011 and which it exited last year.
Lisbon earlier this month secured authorization from its European partners, who also contributed to its bailout, to make early repayments of 14 billion euros over the next 2-1/2 years.
Reporting By Andrei Khalip; Editing by Hugh Lawson