Seven News broke the story last week that government intends to borrow 125 million US dollars, and yesterday Cabinet agreed to take a resolution to the House supporting it. According to today's cabinet briefing, the bond issued from Bears, Sterns & Co. will save government 53 million US dollars in debt payments over the next 9 years. That's a tidy saving, and Cabinet says that technocrats at the IMF support the bond issue. While that's all well and good, such savings on less than concessionary bond issue at 10% for 10 years indicates that the loans being refinanced are very expensive, pegged at prohibitively high interest rates, as much as 13%.

Tags Cabinet IMF