Greece pays back IMF, by borrowing from IMF

Greek has paid back the IMF due of € 750 million to IMF on May 12^th, without the assistance of European creditors who are withholding last remaining tranche of € 7.2 billion of Greek bailout program.

A letter from Greek Prime Mister to IMF chief Christine Lagarde reveals that Greece came very close to  default with Tsiparas warning of  Greece's inability to clear IMF repayment without EU assistance.

 To pay back IMF, Greece had to tap an emergency account fund that it holds with IMF. This means Greece paid back IMF by borrowing from IMF.

Mr. Tsiparas has warned IMF chief that payment will be missed unless Greece is allowed to borrow money by issuing more short term debts.

This reveals that Greece is very close to bankruptcy due to cash crunch.

Next dues -

Focus now shifts on next repayment tranche of Greece.

• Greece is due to payback IMF another € 1.5 billion by end of next month, first tranche is due on June 5, totaling € 300 million.
  
  
• Moreover Greece needs to clear salaries and pensions due in every month.

Warnings from IMF -

• IMF has warned Euro zone creditors that talks are heading nowhere and without any debt restructuring/write offs by Euro area creditors, IMF will be forced to withhold € 3.6 billion contribution in Greece's remaining € 7.2 billion payment tranche.

Greek condition even if doesn't move Euro much, has the potential to trigger massive risk aversion which might lead to large scale selloffs in European assets namely bond and equity.