Hungarian Central Bank repays IMF loan

Hungary's central bank has paid off its 2009 loan to the International Monetary Fund ahead of schedule.

Hungary's central bank says it's fully repaid a 2009 International Monetary Fund (IMF) loan ahead of schedule, and that it has no further obligations to the lender.

"On August 6, the Hungarian Central Bank (MNB) repaid in full the outstanding amount owed on a loan issued by the IMF in June 2009," said a statement on the bank's website on Wednesday.

"Hence there is no remaining debt owed to the Fund," it added.

The bank received the loan -- around 1.45 billion euros ($A2.17 billion) -- in 2009 as the second instalment of an 11.7 billion euro IMF stand-by agreement approved in late 2008 after Hungary was frozen out of the bond market at the height of the global financial crisis.

In total, the November 2008 bailout package comprised around 20 billion euros including contributions from the European Union and the World Bank, as well as the IMF.

According to the bank, repayments to the IMF were begun in September 2012 and the final instalment, paid on Tuesday, was around 721 million euros.

In July, MNB governor Gyorgy Matolcsy, a loyal ally of Prime Minister Viktor Orban, told the lender that it should close its Budapest office -- opened in 2009 -- once the repayment was made, ahead of schedule in June 2014.

Hungary has had a fractious relationship with the IMF since Orban's right-wing government came to power in 2010.

Long-running talks begun in 2011 between Budapest and the IMF on a 'safety-net' second loan -- totalling 15 billion -- ended early in 2013 after consistent disagreement on issues including the nature of the loan and economic policy.

Last year the government ran an advertising campaign criticising the IMF for "interference" in Hungarian policy-making.

Opposition parties earlier criticised the planned early repayment of the loan as a "costly propaganda tool" ahead of elections due in early-2014.


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Source: AAP


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