BULGARIA will repay 280 million euro of its debt to the International Monetary Fund (IMF) and the World Bank (WB) ahead of schedule.

Finance Minister Plamen Oresharski said on December 1 that he had gained the approval of the ruling parties’ coalition council, consisting of the leaders of the Bulgarian Socialist Party, Sergei Stanishev, who is also the prime minister; the National Movement Simeon II, Simeon Saxe-Coburg; and the Movement for Rights and Freedoms, Ahmed Dogan, on the repayment to be carried out by early 2006.

“The Government agreed to make early back payments to the IMF at the end of 2005 and in 2006, as well as to early cover loans from the WB in January 2006,” the Cabinet said in a statement.

The move would cut the public foreign debt to 5.2 billion euro at the end of January, the statement also said.

At the end of September 2005, Bulgaria’s external debt amounted to 5.479 billion euro (of which 4.975 billion euro in government debt and 503 million euro in government-guaranteed debt). By the same date, the fiscal reserve of the state was about 2.5 billion euro.

The early settlement would help reduce the vulnerability of the economy to adverse external developments by offsetting the increase of the external private debt, which amounted to 62.1 per cent of GDP at the end of August 2005, Oresharski said.

Bulgaria owed 778.3 million euro to the IMF and 917.1 million euro to the WB at the end of September.

In July, Bulgaria bought back its last outstanding Brady bonds, the Front Loaded Interest Reduction Bonds, with a par value of $607.64 million.

The country bought back two other types of Brady bonds in January 2005 and July 2004. Bulgaria issued in July 1994 three types of Brady bonds worth $5.16 billion, backed by the US treasury, to restructure an $8.1-billion debt owed to the London Club of creditors. The bonds were named after former US treasury secretary Nicholas Brady.