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Russia to rescue Cyprus form debt crisis
23.12.2011 17:39
Russia to rescue Cyprus form debt crisis

December 23 the Russian Ministry of Finance signed an agreement with Cyprus on crediting this country for 2.5 billion Euro, said RIA News. The first tranche will be transferred to Cyprus accounts by December 31. This will let the republic to refinance its debts on bonds in the start of the next year.

Such a large credit exceeds 10% of Cyprus’s GDP. The loan is considered to be provided on preferential terms. It is valid for 4.5 years, with a nominal annual yield of 4.5%, with a possibility of advanced payment without additional sanctions.

ITAR-TASS news agency reported that the loan will be allocated in three installments of which the second will be disbursed in February 2012.

Cyprus is living thought difficulties due to debt crisis in Greece with which it is connected economically. In 2011 the largest rating agencies reduces Cyprus credit rating on some levels.

It was reported earlier the Cyprus government won’t be able to pay its 1.2 billion Euro debt on bonds in the start of 2012. At that in August 2011 the European Commission informed it would not give credits to Cyprus like it did to Greece.

As a result Cyprus applied to Russia, which has about $ 500 billion in international reserves.   

Author: Irina Fomina

Tags: Russia     

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