By Scott Rose

Cyprus is seeking a second loan from Russia in less than a year to help mitigate threats to its economy after becoming the fifth of the euro area’s 17 members to request a bailout.

The east Mediterranean island has asked to borrow 5 billion euros ($6.2 billion) from Russia, according to Finance Minister Anton Siluanov, who said the application is being considered.

“We’ve received a request from Cyprus and we’re looking at it now,” Siluanov told reporters today in Moscow. “Cyprus didn’t just approach us but also asked the European Union for help.”

Cyprus last month followed Greece, Ireland, Portugal and Spain in seeking help to return to financial health. The third- smallest euro economy has been hurt by losses from Greece’s recession and is seeking support from the euro region’s firewall funds to bolster its banking industry.

Russia, which agreed to lend Cyprus 2.5 billion euros in December, has received requests for financial aid from other countries and will act to help euro-area nations safeguard the currency, First Deputy Prime Minister Igor Shuvalov has said, without identifying the nations in question.

The world’s biggest energy exporter had $514.3 billion of gold and foreign-currency reserves at the end of last month. More than 41 percent of its currency reserves were in euros as of Sept. 30, according to the most recent central bank figures.

“We have an interest in seeing the entire euro zone and everything connected to the EU currency union remain fairly stable,” Shuvalov said June 28. “If we can, without any damage to our reserves, offer some assistance, knowing that we’re stabilizing the situation and thereby helping ourselves -- in that case the government should do it.”

Russia has begun to examine Cyprus’s request, Konstantin Vyshkovsky, head of the Finance Ministry’s debt department, said today.

“We’re looking at whether it’s possible and makes sense to provide another loan,” he told reporters after Siluanov addressed the lower house of parliament, or State Duma.

Cypriot President Demetris Christofias expressed confidence yesterday that his government will win a loan from Russia on top of the European bailout requested last week.

“We do expect a positive reply,” Christofias told reporters in Nicosia, Cyprus. “We are still waiting for the reply.”

[Bloomberg]