The Cyprian government has approved the taking out of a loan from the Russian Federation in the amount of EUR 2.5bn, or USD 3.3bn.
The loan agreement was made so that Cyprus could service its debts, stimulate growth and return investor trust into the economy of this country, is the official position of the government of Cyprus.
An annual interest rate of 4.5% has been agreed while the debt should be repaid in 4.5 years.
The loan, together with government measures that ensure fiscal stability over a middle period of time, will yield great benefits to the island, says the spokesperson of the government, Stefanos Stefanu.
The connection of Cyprian banks with Greece (which is in large debts) has lowered Cyprus’s credit rating several times, raised interest rates for bonds and disabled the government from borrowing commercially.
Stefanu remarked that the loan would enable lower interest rates for state bonds, that it would raise the country’s credit rating and bring back investors. Russia and Cyprus have strong diplomatic ties but also that the big Russian money lies in Cyprian banks.