Portugal to pay back IMF loan early: minister

Portugal will pay back its loan from the International Monetary Fund (IMF) earlier than planned, Finance Minister Maria Luis Albuquerque announced on Wednesday.

The debt-laden country will follow Ireland in making a repayment to the IMF, taking advantage of low borrowing costs for European peripheral governments.

"The country has accumulated a very significative liquidity buffer," Albuquerque told a parliamentary committee, adding that this would help the country face possible problematic periods with "tranquillity."

Albuquerque pointed out that Portugal managed to sell long-term bonds on Jan. 13. The country sold 5.5 billion euros in bonds including 2 billion euros of 30-year debt.

"The government will start the necessary proceedings for the early repayment of the sum owed to the IMF," Albuquerque said.

Portugal signed a 78-billion-euro bailout program in May 2011 with the European Commission, the IMF and the European Central Bank (ECB) when it was on the verge of bankruptcy, and successfully exited that program in May last year.

The IMF lent Portugal 26.9 billion euros, which carried a 3.7-per-cent tax rate and an average loan maturity of 7 years.

Portugal debt yields fell to record lows recently as speculation that the ECB will start buying loans spurred demand before its crucial meeting on Thursday. Enditem