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Greece avoids IMF default

Published Friday, April 10th, 2015

Global equity indices maintained their upward momentum yesterday as investors breathed a sigh of relief following the latest crunch loan repayment by Greece and lapped up German data pointing to a rise in exports and improvement in industrial output during February. Athens kept good on its recent pledge to honour all existing debt obligations after it repaid a €450 million loan tranche to the IMF. The crucial payment soothed market jitters of a looming default and came as Greek economic prospects were given a helping hand by figures showing that its jobless rate dipped to 25.7% in January and industrial production bounced 1.9% y/y in the subsequent month.

The reprieve offered to the embattled eurozone member is however likely to be short-lived as attention turns to the looming liquidity crunch faced by its banking sector with many believing that the country’s cash reserves will run out by the end of the month. The likelihood of Athens being forced into bankruptcy will be largely decided by its lenders who yesterday gave Greece a deadline of six working days to come up with a revised list of reforms which would hold the key to unlocking fresh financial aid. Evidence of underlying caution and concerns of impending market turbulence was highlighted by strong demand for German 10- year Bunds whose yields touched a record low of 0.14%.

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Posted by Stephen Brennock

Stephen Brennock joined PVM in 2013 after having worked as a project manager for a business development firm. He graduated with a degree in Business Management in 2007.