The International Monetary Fund on 15 May 2013 approved a three-year, 1.3 billion dollars loan for supporting Cyprus’ attempts to stabilize its financial sector and to bring the Government’s deficit under control and restore economic growth.
The IMF loan to Cyprus is basically a part of a rescue package of 10 billion euros (12.9 billion dollars) counterfeit in March 2013 with the eurozone’s bailout fund.
The loan was approved by IMF’s executive board which also includes an immediate disbursement of 110.7 million dollars. Counting the IMF disbursement, Cyprus has received about 2.7 billion dollars in the third week of May 2013 from its international lenders.
The Luxembourg-based European Stability Mechanism, which is a eurozone bailout fund, on 13 May 2013, announced that it had approved its first bailout tranche for Cyprus and transferred an initial 2 billion euros (2.6 billion dollars). The rest of the tranche — up to 1 billion euros — will be transferred by 30 June 2013.
The loans approved by the European Stability Mechanism help to maintain financial stability in the euro area and buy time for Cyprus. It is important here to note that in the eurozone’s long-running fiscal crisis, Cyprus followed Greece, Ireland and Portugal to become the fourth eurozone country since 2010 to agree to a full bailout.