Russia says no decision yet on Cyprus loan

Russia says no decision yet on Cyprus loan
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.

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