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Montenegro repays second instalment of China's Exim Bank loan

Author Radomir Ralev
Montenegro repays second instalment of China's Exim Bank loan Source:

PODGORICA (Montenegro), January 24 (SeeNews) - Montenegro repaid the second instalment of a loan extended by China's Exim Bank for the construction of the Bar-Boljare motorway, the country's finance ministry said.

The government paid 28.96 million euro ($32.8 million) on the second instalment of the loan, achieving savings worth 5.15 million euro, due to an agreement signed in July to hedge $944 million of debt owed to China for the construction of Bar-Boljare motorway, the finance ministry said in a statement on Friday.

The total amount of the second instalment of the loan is $38.67 million, of which $30.47 million on the principal and $8.2 million in interest, the finance ministry said.

"On that basis, the state of Montenegro paid the amount of 27.73 million euro to four banks from the hedging arrangement for principal and interest, while they paid $37.28 million to the state for Exim Bank. In total, the second instalment of the loan cost Montenegro 28.96 million euro, as that final amount includes an additional unhedged portion of the principal and interest of $1.4 million," the finance ministry noted.

With the hedging operation, Montenegro managed to lower the interest rate on the loan to 0.88% in euro from 2% in U.S. dollars and will be able to save about 8 million euro annually, finance minister Milojko Spajic said in July.

In July, Montenegro repaid 27.79 million euro on the loan's principal and interest.

($ = 0.8829 euro)

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