Cyprus Starts Repaying €2.5bn Russian Loan

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According to sources in the finance ministry, Cyprus has recently paid EUR €312.5 million as the first instalment to the Russian Federation as part of a EUR €2.5 billion loan agreed more than 6 years ago and was restructured in 2013.

The government of the former president Demetris Christofias agreed the loan in late 2011. This particular government lost access to financial markets and was seeking to prevent a request for a bailout from the European Union and the International Monetary Fund (IMF) which will be repaid in 8 biannual instalments of EUR €312.5 million. The next payment is in September.

According to the most recent available statistics on the website of the Public Debt Management Office, the respective Russian loan accounted in September for 13% of the total public debt of EUR €18.8 billion.

In addition, Cyprus was required to pay a 4.5% annual interest on the borrowed amount and repay it all in one single instalment in 2016 as part of the initial loan agreement.