"The Russian ambassador to Iceland, Victor I. Tatarintsev, informed the chairman of the board of governors of the Central Bank of Iceland this morning that Russia would grant the Central Bank a loan in the amount of 4 billion euros," the Icelandic Central Bank's website said, adding that Russian Prime Minister Vladimir Putin had confirmed this decision.
Russian Deputy Finance Minister Dmitry Pankin denied there had been any talks on a loan for Iceland.
"There have neither been any official requests for a loan from Iceland, nor talks, nor decisions made on the issue," he said.
Iceland's Central Bank said the maturity of the loan would be three to four years on terms ranging from 30 to 50 basis points over LIBOR.
According to the statement, Iceland's prime minister initiated contacts on this agreement some months ago, and representatives from the Central Bank and the government would finalize the agreement in Moscow.
The bank said the loan would significantly bolster Iceland's foreign exchange reserves, strengthening the stability of the exchange rate of the krona.
