Bloomberg: Greece set for IMF repayment as cash reserves risk running dry

Greece is set to make its next repayment to the International Monetary Fund (IMF) Monday, further depleting cash reserves that risk running out this month unless a deal is reached with European partners, Bloomberg reported.

Greece will deposit about €588 million with the IMF, as scheduled, according to a Finance Ministry spokesman, who declined to be named in line with policy.

As other repayments come due this week, the government said on March 14 it had a plan to “enhance its liquidity” and won’t have problems paying wages or pensions.

Locked out of capital markets, Prime Minister Alexis Tsipras’s government is eating into cash reserves while trying to get the euro region to release more funds from its €240 billion bailout program, it added.

He’ll join European leaders in Brussels on Thursday, after tensions between Greece and Germany escalated last week with Greece filing a complaint against German Finance Minister Wolfgang Schaeuble and the German minister saying he couldn’t rule out Greece leaving the euro.

“My message to the viewers this evening is very simple: help us to grow, so that we can pay the money back,” Greek Finance Minister Yanis Varoufakis said on German ARD television late Sunday. Greece needs investment for growth, he said.

Greek bonds are the worst performing of all 34 sovereign indexes tracked by Bloomberg’s World Bond Index this year, as the yield on 10-year notes rose 137 basis points last week to 10.78%. Greek stocks fell 13.9% in the last month, the worst performance of all major equity indices tracked by Bloomberg.

Cash reserves that may run out by the end of the month will be further depleted on Friday when the government has to make another repayment of about 353 million euros to the IMF and refinance 1.6 billion euros of short-term notes. It plans to auction 1 billion euros of treasury bills on March 18, Bloomberg reported.

“Where the government is unable to tap the market and where banks are unable to tap the market, in my view there are concerns about monetary financing if ELA is used to purchase treasury bills or to roll over treasury bills,” Bundesbank President Jens Weidmann said in a Bloomberg Television interview in Frankfurt last week.

The ECB last week increased its Emergency Liquidity Assistance ceiling for Greek banks, according to two people familiar with the decision.

“The European Central Bank is unlikely to be more flexible with Greece if the country doesn’t reach an agreement with its creditors”, Goldman Sachs strategist Francesco Garzarelli said in an interview in Cernobbio, Italy on March 13.