The interest rate that Ireland is paying on its International Monetary Fund loan is set to fall as part of changes being made to member countries' voting shares, the IMF said last night.
IMF spokesman David Hawley told a regular news briefing that Ireland's IMF quota, which determines among other things how much a country contributes and can borrow from the IMF, was set to increase following governance reforms approved in 2008.
'Ireland is one of those countries whose quota stands to increase under this agreement,' Hawley said. 'As a consequence, the amount of its loan relative to its quota will fall, and that will have a bearing on the interest rate paid on its borrowing from the IMF,' he added. He said the rate currently stands at 3.1%.
Mr Hawley said the IMF was in the process of calculating the adjustments for each member country, but could not offer exact figures. The quota changes would probably affect several other borrowers, he said, but could not elaborate.
Interest rates paid on IMF loans are tied to the IMF's Special Drawing Rights, the fund's internal unit of account, and are market determined.
The IMF contributed €22.5 billion to an €85 billion joint IMF/EU rescue for Ireland on November 28 to help restructure shattered Irish banks.
Turning to Greece, which secured a €110 billion IMF/EU bailout last year to ease its economic crisis, Hawley said it was not in Greece's interest to restructure its debt. He said the IMF would support a longer repayment period for IMF loans.
'The government of Greece has repeatedly stated that debt restructuring is not their intention nor is it in their interest. We agree with them on this point,' the IMF official said.
