Tuesday, June 7, 2011

IMF Says Loan Program to Portugal Entails ‘Important Risks’

The International Monetary Fund’s 26 billion-euro ($38.1 billion) loan to Portugal “entails important risks,” the agency’s staff said in a report prepared to assess the country’s request for assistance.
The measures attached to the loan “may fail to alleviate sovereign debt concerns, with an adverse impact on government financing prospects,” IMF staff wrote in a May 17 report that was posted on the fund’s website today. “In particular, refinancing risks from the closure or contraction of the Treasury bills market represent a near-term refinancing risk for the government.”