Hungary to close IMF’s representative office, seeks early loan repayment by end-2013

By bne IntelliNews July 16, 2013

Hungarian central bank governor Gyorgy Matolcsy has initiated the closure of the IMF’s resident representative office in Budapest as the country seeks to repay the remaining tranches of an IMF loan it received in 2008 ahead of schedule, the governor said in a letter to IMF’s managing director Christine Lagarde. The letter was posted on the central bank’s website. The loan repayment will likely take place already in 2013.

Meanwhile, the IMF confirmed in a press conference that it will not seek a replacement of its resident representative in Hungary, Iryna Ivaschenko, whose mandate ends in August 2013, MTI news agency informed.

We note that, the principal outstanding on the part of the IMF loan taken out by the state is about SDR 2.1bn (EUR 2.4bn), with the last repayment, worth about EUR 300mn, due in March 2014. The central bank also owes SDR 790mn (EUR 908m) on its own loan from the IMF. The last repayment on the loan is due in June 2014.

The IMF disbursed in 2008 a combined SDR 7.64bn under the Stand-by Arrangement, including a SDR 1.27bn credit for the National Bank of Hungary.

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