IMF board OKs $1.3 billion loan for Cyprus

WASHINGTON Wed May 15, 2013 2:50pm EDT

People wait for their turn to register for unemployment benefits at a local jobs centre in Nicosia April 23, 2013. REUTERS/Andreas Manolis

People wait for their turn to register for unemployment benefits at a local jobs centre in Nicosia April 23, 2013.

Credit: Reuters/Andreas Manolis

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WASHINGTON (Reuters) - The IMF's executive board approved a $1.3 billion, three-year loan to Cyprus on Wednesday, part of a larger international bailout to help the Mediterranean country avoid defaulting on its debt.

Cyprus had to comply with certain conditions - including winding down its second-largest bank and imposing losses on large depositors - in order to receive the funds, which total 10 billion euros ($13 billion). The approval of the IMF's board means Cyprus immediately gets $110.7 million.

The financing package "is intended to stabilize the country's financial system, achieve fiscal sustainability and support the recovery of economic activity to preserve the welfare of the population," the IMF said in a statement.

($1 = 0.7705 Euro)

(Reporting by Anna Yukhananov, editing by G Crosse)

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