Market participants and some economists have posed doubts over Greece’s ability to pay back € 450 million due to IMF on April 9th.
Greek finance minister, Yanis Varoufakis met IMF chief Christine Lagarde for more than two hours in an informal meeting on Sunday. Both parties looked more optimistic over Greece’s ability to pay back the loan. Mr. Varoufakis is scheduled to meet US senior officials on Monday. US has criticized IMF’s greater involvement over Euro zone countries, that might risk the institute’s capital deployed, should a country choose to default or drop out of Euro zone.
- Technically speaking, Greece will not be defaulting, should it miss April 9th deadline. It will have another 30 days to make the payment, before any default occurs. However, this might hurt confidence of traders and investors over its ability and intention, thus creating a havoc for Euro and Greek securities.
Greece will be first developed country, should it default on IMF loan.
- Paying € 450 million back is not the end, Greece is due to pay € 9 billion towards IMF this year. This can’t be restructured or rescheduled without a new bailout program.
Greece’s meeting US officials and IMF chief has raised speculation that Greece might be looking for help form them to convince European counterparts like ECB and Germany to relax criteria and reforms asked.
Euro in the meantime treading water around 1.098, got boost from weaker NFP, however failed to break the resistance above 1.10.
The material has been provided by InstaForex Company – www.instaforex.com