Cyprus is in talks with Russia and China for loans of about 10 billion euros, Athens news agency reported on Friday quoting Cypriot Government spokesman Christos Christofides.
“We are holding high-level negotiations with Russia and waiting for an answer from China,” Christofides said.
Last year, Russia agreed to grant 2.5 billion euros in loans to Cyprus, which amounts to about 10 percent of the republic’s GDP.
Cyprus needs the funds to recapitalize local banks which are under stress due to the eurozone debt crisis. International rating agency Moody’s cut the ratings of Cyprus’s two largest banks, Bank of Cyprus and Hellenic Bank in June, and put the island’s third largest bank, Cyprus Popular Bank, on review with a possible downgrade.
Cypriot banks’ exposure to Greek investments is estimated at 23 billion euros, which exceeds Cyprus’s 2011 GDP of 17.3 billion euros.
The troika of international lenders comprising the European Commission, European Central Bank and the International Monetary Fund is likely to visit Cyprus next week for negotiations on possible loans.