(MOSCOW) - A top Russian official denied Tuesday that Moscow had granted Iceland a four billion-euro (5.4 billion-dollar) loan, saying discussions on the matter had not begun, RIA Novosti news agency said.

"There has been no official request from Iceland for a Russian loan, negotiations have not started and no credit decision has been taken," RIA Novosti quoted deputy finance minister Dmitry Pankin as saying.

Iceland's central bank said earlier that Russia would grant it a loan of four billion euros in order to help the Nordic country cope with financial sector turmoil.

"The Icelandic prime minister initiated contacts concerning this agreement some months ago. Representatives from the central bank of Iceland and the government will finalise the agreement in Moscow," the bank said.

Russian Prime Minister Vladimir Putin had confirmed Moscow's decision, it added in a statement.

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