Travel Guide to Iceland
Latest news
A+ R A-

Iceland paid 30 billion ISK in interest expenses because of emergency loans Featured

The Central Bank of Iceland The Central Bank of Iceland

Total interest expenses of the Icelandic government for payments of foreign loans, during the years 2009 - 2011, were 30.4 billion ISK, or around 177 million EUR. This is around 1.8% of  the GDP in 2011. The loans include emergency loans from the IMF and some assisting nations, loans that Iceland took out in the first months following the financial crisis. 

The total interest expenses minus interest revenue for the period was 13.9 billion ISK, or around 80.9 million EUR. This was reported in a reply from the Ministry of Finance and Economic Affairs because of an inquiry from the MP Asmundur Dadason. 

Mr. Asmundur Dadason requested an itemized list over foreign loans that were taken out after the crisis. The loans were mostly used to strenghten the foreign exchange reserves of the country. In the reply from the Ministry it is noted that in 2012 the government took out a loan for 1 billion USD at 5.857% rate for 10 years. That loan was used to pay installments on the loans from the IMF and the Nordic countries. Those loans had lower interest rates, or from 2.4% to 3.4%.

Mr. Dadason asks where the money was kept and how it was invested, from the day the loans were taken out until today. In the reply it was said that most of the foreign exchange reserves are invested in government bonds around the world. The bonds must fulfill a certain credit rating criteria according to protocols at the central bank. Cash is however deposited at foreign central banks and at the IMF.

Mr. Dadason asked if the government had insured itself against possible defaults of these governments or institutions. The reply from the ministry reads:

"Management of the foreign exchange reserves is conducted so that risk is kept at a minimum but also so that regular transactions can take place. Most of the foreign exchange reserves are invested at central banks, the IMF or bonds with the highest credit ratings and high liquidity. The Central Bank of Iceland does not buy bonds issued by financial institutions unless the credit rating is acceptable according to protocols."

 

Source: DV.is

http://www.dv.is/frettir/2013/2/12/30-milljarda-vaxtakostnadur-vegna-neydarlanapakka/

 

Last modified on Tuesday, 12 February 2013 17:10

Most recent news ...

Life lessons from Iceland's handball hero - VIDEO

Life lessons from Iceland's handball hero - VIDEO

Icelandic handball hero, Ólafur Stefánsson, was interviewed by CNN recently. The legend quit playing handball earlier...

Icelander Halldor Helgason has the snowboarding jump of the year

Icelander Halldor Helgason has the snowboarding jump of the year

An unbelievable jump by Halldor Helgasaon has been chosen the jump of year 2013 by the magazine Snowboarding. This is...

Ben Stiller talks about Iceland - VIDEO

Ben Stiller talks about Iceland - VIDEO

Ben Stiller's new movie The Secret Life of Walter Mitty recently premiered and has been well received. Iceland plays ...

Iceland May Just Be The Most Beautiful Place On Earth

Iceland May Just Be The Most Beautiful Place On Earth

Memolition recently posted a story with 17 photos, claiming that Iceland may be the Most Beautiful Place on Earth. It...

Cut development aid to children by 12%

Cut development aid to children by 12%

"It is a concern that always when a recession comes the development aid is decreased. That was also done during the f...

The Secret Life of Walter Mitty premiere - VIDEO

The Secret Life of Walter Mitty premiere - VIDEO

A special celebratory premiere of Ben Stiller's 'The Secret Life of Walter Mitty' was held in Smárabíó Movie Theater ...

19 people will be granted Icelandic citizenship

19 people will be granted Icelandic citizenship

A bill has been put forward in parliament, which would grant 19 individuals Icelandic citizenship if passed. A total ...

Free Concert with Herbert Gudmundsson in Reykjavík tonight

Free Concert with Herbert Gudmundsson in Reykjavík tonight

Musician Herbert Guðmundsson celebrates his 60th birthday today. The singer will celebrate with a concert in Kex Host...

No Travel Weather Today

No Travel Weather Today

Travelers in Iceland should follow the weather forecast closely for the next few days. It's going to be windy the nex...

Russell Brand visited Mayor Jon Gnarr

Russell Brand visited Mayor Jon Gnarr

Mayor of Reykjavik, Jón Gnarr, had an interesting guest over in city hall earlier this week. Russell Brand was in Ice...

NOI on Twitter

Extreme Iceland Travel Agency and Tour Operator

Extreme Iceland travel agency can help you with anything related to your stay in Iceland

Upcoming events

No events

NOI on Facebook

Latest blog

Do you have travel stories or pictures from your travels in Iceland?

You can share them with us, send an email to travel@newsoficeland.com

Stay connected

Latest blog

Latest Editorials

Latest Interviews

Videos

Travel

Business & Economics

Politics

Entertainment

Login

*
*
*
*
*

* Field is required