LONDON (AP) -- The Icelandic government has reached agreement with the International Monetary Fund for a two-year, $2 billion loan as part of an aid package to assist the crisis-hit Nordic country.
The Icelandic government says the deal, tentatively reached Friday, will give it immediate access to $830 million if approved by the IMF board in Washington.
Iceland sought help from the IMF after its banking system collapsed under the weight of the global credit crunch -- threatening the nation's entire economy.
The country's currency, the krona, has lost half its value since January and banking transactions to and from the North Atlantic island nation have seized up, leaving its population of 320,000 virtually stranded.
The IMF loan to Iceland is the first by the body to a Western nation since 1976.
The Nordic country turned to the IMF after talks with Russia over a euro4 billion ($3.2 billion) loan failed.
(Copyright 2008 by The Associated Press. All Rights Reserved.)