Menu
Economy

Russian loan to be repaid in early September

August 20, 2019 at 8:15am
Edited by

The next and last installment of Cyprus’ Russian loan will be paid in September.

The outstanding amount stood at €1.5b at the end of June and the government has already informed the Russian authorities.

The option for an early repayment of the loan was included in the initial agreement and carries no penalty.

Though repayment of the full amount will bring a reduction in cash available to the government, it will mean that a significant part of the debt with a relatively high cost at 2.5% interest paid will have been paid.

The public debt will drop to €21.2b – at about 100% of GDP.

The government aims to bring the public debt to 96% of GDP by the end of the year.

According to the public debt management office,  Cyprus’ net financing needs for 2019 are €2.3b. Cyprus has raised €2.3b from the three EMTN issues at the beginning of the year and smaller sums from domestic bonds.

About €700m from the budget surplus will be used to pay down the debt.

If all goes well, liquidity at the end of the year will cover financing needs for the first nine months of 2020.

In 2020, another €1.4b in debt will mature, mostly local bonds while €1b matures is due to be repaid in 2021.

The amount of debt due for repayment jumps to €2b in 2022 and €1.5b in 2023.

The biggest sum in 2028 when €2.5b of debt is due to be repaid.