STOCKHOLM, June 25 (Reuters) - The Swedish government said on Thursday it would approve a $700 million loan to crisis-hit Iceland as part of the financial support package tailored by the International Monetary Fund.
"The loan is part of a joint Nordic pledge to lend $2.5 billion to support Iceland's economic reform programme," the government said in a statement.
The North Atlantic island nation was forced to seek aid from the IMF and its European neighbours after the collapse of its main commercial banks late last year shattered its economy.
Iceland was granted an IMF-led aid package of some $10 billion which included the $2.5 billion contribution from its Nordic neighbours.
In January this year, Sweden said its contribution to the aid package would be up to $764 million. (Editing by Toby Chopra)