Greece becomes first developed nation to default IMF debt
Greece has become the first developed nation to default on International Monetary Fund (IMF) debt. It has defaulted on a 1.7 billion dollars payment to IMF.
The deadline for debt payment was missed by Greece after Eurozone Finance Ministers refused to extend its bailout. They had refused the bailout after Greece rejected the proposal given International Monetary Fund (IMF), European Central Bank (ECB) and the European Commission (EC). Apart from this, ECB also has frozen its liquidity lifeline to Greek banks.
It should be noted that Greece is now formally in arrears and there are fears that this could put Greece at risk of shifting back to its old currency Drachma by leaving the Euro. This may increase in the cost of imports of Greece leading to increase inflation further worsening its economic crisis.
Impact of Greece crisis on India
The Greece crisis may depreciate the value Euro which may led investors to invest in Gold and Dollar to be on the safer side. In this case it may appreciate value of dollar and make it stronger as compared to Indian rupees.
Thus trade between the member countries and India may be largely affected as it will make imports expensive and exports cheap. It will directly affect the oil prices.