Russia has made no decision yet on whether to extend the duration or ease the terms of a sovereign loan to Cyprus, a government source told Reuters on Monday.
European Union officials, who over the weekend agreed a 10 billion euro bailout for the Mediterranean island, have said they expect Russia to extend its 2.5 billion-euro loan by five years, until 2021, and refinance terms .
A proposed levy on the island’s bank deposits, which was a central element of the EU rescue package, should not alter domestic capital flows, a senior Russian official was quoted as saying.
Officials have also said Russian investors are interested in buying a majority stake in Cyprus Popular Bank and increasing their holdings in Bank of Cyprus – the two biggest banks on the Mediterranean island.
The involvement of any Russian investors – private or state – in recapitalization of the island’s struggling banks is still a matter of talks, the government source said.
“There has been no decision yet,» the source said.
Russian banks had about $12 billion placed with Cypriot banks at the end of 2012, according to Moody’s rating agency. Based on official Russia’s central bank data, that would suggest an increase of around $3 billion from 2011.