Portugal has made an early repayment of one billion euros to the International Monetary Fund and intends to repay a further 2.6 billion euros of bailout loans by August, the government said Friday.

As part of a bailout in 2011, Portugal was loaned 29.6 billion euros by the IMF, more than half of which has already been repaid.

But Lisbon aims to reduce interest on borrowings with further early payments.

The IMF interest currently stand at 4.6 percent, compared to available market rates of 3.0 percent over 10 years.

"The early repayment to the IMF is significant in improving the viability of debt by reducing its cost," the finance ministry said in a statement.

Once the next 2.6 billion euro sum is repaid, 10.4 billion euros of debt will remain to be repaid, according to the government.

source: AFP