Menu
RSS

Central Bank of Iceland to hold foreign currency auction Featured

Central Bank of Iceland to hold foreign currency auction

The Central Bank of Iceland is offering to purchase euros in exchange for Icelandic krónur for long-term investment in the Icelandic economy, or in exchange for payment in Treasury bond series RIKS 33 0321. Furthermore, the Central Bank of Iceland advertises herewith for bids on the sale of Icelandic krónur for cash payment in foreign currency. 

The three auctions, which are scheduled for Wednesday 14 May 2014, are an element in the removal of restrictions on movement of capital as set forth in the Bank’s capital account liberalisation strategy of 25 March 2011, and in the Bank’s Terms of foreign exchange transactions according to the Investment Programme for capital account liberalisation, dated 18 November 2011, with subsequent amendments.

As is stated in the Central Bank’s capital account liberalisation strategy, financial stability will be considered at every stage in the process. In view of this, the Central Bank reserves the right to restrict the total transaction volume in consideration of the impact of the auctions on financial institutions’ liquidity. The final auction amount will be determined by participation. The auction is structured with a single-price format; i.e., all accepted offers will be offered to investors at the same price. Settlement of transactions in all three auctions will take place two days after the conclusion of the auction.

Commercial banks are invited to act as intermediaries for the purchase of Icelandic krónur in exchange for foreign currency. Specified primary dealers in the bond market will act as intermediaries in the auction involving payment in Treasury bonds. A list of these parties can be found on the Central Bank of Iceland website. Minimum amount for participation in the Treasury bond auction will be EUR 10,000. The total amount of bids accepted in the Treasury bond auction is limited to ISK 400 million. Financial institutions that have concluded a collaboration agreement with the Central Bank of Iceland may act as intermediaries (see information below) and will handle investors’ applications for proposed participation in the auction according to the Investment Programme. That auction is open to investors whose applications for participation in the Investment Programme have been approved. Minimum amount for participation in the Investment Programme auction will be EUR 25,000. The deadline for submittal of applications is 22 April 2014.

Source: Central Bank of Iceland

 

back to top

Business

Politics

Travel

Sports

Entertainment

Culture