IMF approves next $113m aid loan to Cyprus

City A.M. Reporter
CYPRUS yesterday passed its critical review by the International Monetary Fund (IMF), allowing the finance body to give the stricken Mediterranean island the next tranche of its bailout loans.

The Fund completed its first review, enabling it to disburse another $113m (£71m) of the programme.

Overall the IMF’s bailout plan budgets for loans totalling $1.3bn for the country, and so far $226m has been approved.

The IMF facility for Cyprus is part of a broader €10bn (£8.4bn) three-year bailout programme with the European Stability Mechanism for the island. Cyprus was badly burnt in the Eurozone debt crisis, particularly through its banking sector’s close links to troubled Greece.

As Greek banks got into trouble in the crisis, their own creditors were hit with losses on their investments.

The haircut imposed on creditors to the Greek government also hit Cypriot banks which had invested in the government bonds.

As part of the €10bn aid package, Cyprus was forced to shut down one of its largest banks and bank deposits seized in a second bank to recapitalise it, in a process known as a bail-in.