The International Monetary Fund yesterday released the next installment of its bailout of Cyprus, €83.5 million euros ($114 million), a desperately needed support for the struggling eurozone economy.
The IMF financing is part of €10 billion bailout package for Cyprus with the European Union.
The IMF said the €83.5 million were made available to Cyprus following the completion of the IMF executive board’s second review of Cyprus’s performance under an economic program supported by a € one billion loan approved in May.
The new disbursement brings the total amount of the IMF’s three-year loan extended to Cyprus to €250 million.
In return for the bailout, Cyprus agreed to a raft of painful reforms, including a massive downsizing of its banking sector.
The international lenders in early November said that the review showed that Cyprus remained on target to meet the terms of its bailout agreement.
The so-called troika of international lenders — the IMF, the European Commission and the European Central Bank — said in a statement that Cyprus was making progress on structural reforms and recapitalisation and restructuring of the financial sector.
The lenders forecast that Cyprus’s gross domestic product would contract by about 7.7 per cent in 2013, or 1.0 percentage point less than previously estimated.