Pearse Doherty (Donegal, Sinn Fein)
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83. To ask the Minister for Finance why Ireland repaid only 81% of its International Monetary Fund loan earlier and the potential saving in repaying the remaining loan earlier than scheduled; and if he will make a statement on the matter. [19882/16]

Michael Noonan (Limerick City, Fine Gael)
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Ireland received SDR19.5 billion, circa €22.5 billion, from the IMF Extended Fund Facility as part of the three-year external financial support programme.

The NTMA completed the third early repayment of Ireland's IMF loan facility on the 20 March 2015, bringing the total amount repaid to SDR15.7 billion, or approximately €18.3 billion. The SDR 15.7 billion repayment, 81% of Ireland's original €22.5 billion IMF loan facility, represented the portion of the IMF facility that attracted the more expensive interest margin charge.

To facilitate this early IMF repayment, it was necessary to secure the agreement of the EU lenders (the EFSF and the EFSM) and the bilateral lenders (the UK, Sweden and Denmark) to waive the mandatory proportionate early repayment clauses in their loan agreements with Ireland.  A condition of their agreement to waive this clause was that Ireland retains an element of IMF funding in order to maintain the IMF's participation in post-programme monitoring. 

It is important to note therefore, that the early repayment of any one lender cannot be treated in isolation from other lenders and market expectations for when programme loans are due to be repaid. Consequently, any proposed early repayment of the remaining IMF funds would similarly require waivers from our lenders not to trigger automatic mandatory proportional early repayments in respect of each of the programme funding partners. The issue of post-programme monitoring would also have to be addressed as this was a condition of the €18.3 billion early repayment.

The balance of IMF loans remains at SDR 3.8 billion, approximately €4.7 billion. If Ireland were permitted to repay the full facility earlier than scheduled, potential savings will depend on timing and prevailing market conditions for replacement debt. A current estimate of the potential savings would be in the order of €100-€125 million.  For the reasons outlined above, there are currently no plans to make any further early repayments, but I will keep the matter under review.

IMF loans are denominated in Special Drawing Rights (SDRs), an international reserve asset created by the IMF. Its value is currently based on a basket of four key international currencies - the euro, Japanese yen, pound sterling and U.S. dollar.