NICOSIA, Cyprus—The International Monetary Fund has approved an 84.7 million-euro ($113 million) payout to Cyprus as part of the country's financial rescue.

Cyprus' eurozone partners last week approved their part of the installment of bailout cash, amounting to 1.5 billion euros ($2 billion). They hailed the country for taking "decisive steps" to stabilize its banks, meet fiscal targets and take structural reforms.

Cyprus in March agreed with the European Commission, the European Central bank and the IMF on a 10 billion euro ($13.36 billion) loan on condition that savings over 100,000 euros in its two largest banks take steep losses.

The Fund said Monday it has also approved the Cypriot government's request to ease its deficit reduction targets for September.