July 1, AtoZForex .com Lagos – Its official, Greece has missed the EUR1.5 billion due to the IMF on June 30. This puts the country in arrears, not default. As Greece misses IMF payment, it makes history being the first developed nation to miss a commitment to the IMF as at when due.
According to Mr. Gerry Rice, Director of Communications at the International Monetary Fund (IMF), he stated that:
“I confirm that the SDR 1.2 billion repayment (about EUR 1.5 billion) due by Greece to the IMF today has not been received. We have informed our Executive Board that Greece is now in arrears and can only receive IMF financing once the arrears are cleared.
“I can also confirm that the IMF received a request today from the Greek authorities for an extension of Greece’s repayment obligation that fell due today, which will go to the IMF’s Executive Board in due course.”
The implication of being in arrears is that Greece is no longer entitled to receive any IMF financing, until the arrears are cleared. Although, Greece has not received IMF financing since August 2014 so that shouldn’t be much of an issue.
Standard and poor stated earlier in June cut Greece’s rating to “CCC”, based on the negative outlook of the nation, given the risk of liquidity worsening. The rating agency also clarified that missing a payment to creditors (IMF, for example) would not mean an automatic downgrade to “Selective Default”, although will likely constitute a negative factor. They stated that by their standards, only a missed payment to a commercial creditor will constitute a default, for instance, a default on ECB bonds.