Athens repays IMF €450m, bond yields slide

Greece repaid €450m it owed the International Monetary Fund on Thursday, sending bond yields sliding as investors' showed relief it had met its deadline.

Yields on the country's shortest dated notes declined, with three-year bonds declining 54 basis points to 20.08 per cent and five-year bonds falling 30 bps to 14.98 per cent.

The 10-year yield, which moves inversely to its price, slipped 18 basis points to 11.03 per cent.

A central bank official said that the payment to the IMF had been made.

The payment only brings minimal relief to Greece, as the country remains cash-strapped and faces more looming debt repayment deadlines.

A senior Greek official earlier this week said that while it would be able to make Thursday's IMF repayment, it will still exhaust its cash reserves by the end of this month if it fails to agree a new reform package with the eurozone.

It is due to pay back €420m to international investors when a six-month treasury bill expires on April 14.

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Athens faces a €950m repayment to the IMF in May as well as €2.4bn in outlays for pensions and salaries.

Economists are split on how and when, or even if Greece will be able to come to an accord with its lenders who have baulked at some of the concessions Athens has put forward.

The radical anti-austerity government has been unable to reach an agreement with the EU and IMF that would unlock €7.2bn in European funding because of foot-dragging by its economic team over reforms that would contradict Syriza's election promises not to raise taxes or back further privatisations.

Finance ministry experts are scrambling to wrap up technical talks this week with officials from the European Commission, the IMF and the ECB with the aim of reaching a deal with eurozone finance ministers in Riga on April 24.

The payment to the IMF preceded economic figures from Greece's national statistics office that showed a surprise jump in industrial production and an improvement in its labour market.

Output from Greek industry climbed 1.9 per cent in February from a month earlier, a sharp contrast from market expectations for a 2.1 per cent decline. A 20 basis point slide in unemployment also added a flicker of optimism, with the closely-scrutinised rate declining to a still painfully high 25.7 per cent in January.

Deflation remains a headwind, with the Greek EU-harmonised inflation rate for March steady at minus 1.9 per cent year on year. The report fell short of economist projections for a slight improvement to minus 1.8 per cent.

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