Serbia to pay half of debt to London club of creditors in April.

By bne IntelliNews March 18, 2013
The Serbian government has adopted the finance minister's proposal to repay early half of the country's USD 860mn debt to the London club of creditors - at the end of April, the ministry said in a statement. The early repayment is possible thanks to the significant liquidity secured in the budget over the past several months and after the interest rates on the Serbian debt declined due to working fiscal policies at home and the favourable situation on the global debt market. The interest rate on the London club debt is 6.75%, which is some two percentage points above the interest on Serbia's last debt issue placed in February. The early payment will result in RSD 1.1bn (EUR 10mn) savings in this year's budget and will have the same favourable effect on government expenditure in the coming years as less money will be allocated for interest payment, the ministry said. It added that the share of public debt in GDP stood at 57.7% at end-Feb after the government serviced maturing credits of overall EUR 419mn in the second month of 2013, out of which EUR 354 on principal payments and EUR 65mn on interest. The government paid out EUR 315mn of principal on the domestic market and plans to continue settling its debt on securities issued at home in the coming months in order to place more funds to the economy.

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