Greece tapped reserves at IMF to make debt repayment

[ATHENS] Greece tapped emergency reserves in its holding account at the International Monetary Fund to make a crucial 750 million euro (US$839 million) debt payment to the Fund on Monday, two government officials said on Tuesday.

With Athens close to running out of cash and a deal with its international creditors still elusive, there had been doubts whether the leftist-led government would pay the IMF or opt to save cash to pay salaries and pensions later this month.

Member countries of the IMF have two accounts at the fund - one where their annual quotas are deposited and a holding account which may be used for emergencies.

One official told Reuters that Athens used about 650 million euros from the holding account to make the payment. "We made use of money in our holding account in the fund,"the official said, declining to be named. "The government also used about 100 million of its cash reserves." Made a day early, the payment calmed immediate fears of a Greek default, but Finance Minister Yanis Varoufakis said on Monday the liquidity situation was "terribly urgent" and a deal to release further funds was needed in the next couple of weeks.

A second Greek official said on Tuesday that the reserves the government tapped must be replenished in the IMF account in"several weeks." Following legislative changes, Greece has meanwhile gathered 600 million euros of local government and other public entity money to help it deal with the cash crunch, the government's spokesman said on Tuesday.

Euro zone finance ministers said on Monday that more work was needed to reach a cash-for-reform deal between Athens and the IMF, the European Commission and the European Central Bank.

Created in 1945, the IMF is accountable to the 188 countries that make up its near-global membership. Each member is assigned a quota, based on its relative size in the world economy, which determines its contribution to the fund's financial resources.

REUTERS