IMF approves new loan tranche for Cyprus

The International Monetary Fund (IMF) announced Friday that its Executive Board has completed the second review of Cyprus's performance under an economic program supported by a three-year Extended Fund Facility (EFF) arrangement, which enables the disbursement of a new tranche of loan to the cash-strapped country. The completion of this review enables the disbursement of 74.2 million special drawing right (SDR), or about 114 million U.S. dollars, which would bring total disbursements under the loan arrangement to 222.7 million SDR, or about 341.9 million dollars, the Washington-based IMF said in a statement. The IMF's EFF arrangement, approved in May 2013, is part of a combined 10-billion-euro (13.68 billion dollars) financing package with the European Stability Mechanism (ESM). It is intended to stabilize the country's financial system, achieve fiscal sustainability, and support the recovery of economic activity. Established in 1974, the EFF mechanism is typically three years in duration and aims at providing assistance to countries experiencing serious medium-term payments imbalances due to structural impediments in production and trade.