MOSCOW - RUSSIA said on Monday it is still negotiating a loan to shore up crisis-battered Iceland's banking sector but its amount would be less than the four billion euros originally announced.
'Four billion is too much in any case, whether this is in euros or dollars,' Deputy Finance Minister Dmitry Pankin told reporters on the sidelines of a news conference.
Last month Russia announced it was considering a loan of four billion euros (S$7.61 billion) for Iceland's troubled banking sector, but officials have since spoken of possible difficulties and approval has been delayed.
'We must also study what decisions are taken at the IMF,' Mr Pankin said.
The International Monetary Fund said on Saturday that it had reached an agreement on providing a loan to Iceland and that the deal would be submitted to a vote by the IMF's board of directors on Wednesday.
'In general, we are going to see how Iceland's macroeconomic problems are solved, whether or not it reaches agreement with other creditor countries and depending on this we will make a decision,' Mr Pankin said.
Iceland's once-booming financial sector has collapsed under the weight of the global credit crunch, forcing the nationalisation of its three biggest banks and prompting a drastic slide in the value of the Icelandic krona.
The Russian economy has also been shaken in recent weeks by a plunge in the price of oil, the country's main export, and massive capital flight. -- AFp
