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The Central Bank is worried about the weak Iceland krona Featured

The Central Bank is worried about the weak Iceland krona

The Central Bank of Iceland, CBI, is worried about the weak Icelandic Krona (ISK) since inflation is quite high. The Governor of the CBI, Mr. Mar Gudmundsson, mentioned this in an interview with Bloomberg. Mr. Gudmundsson says that this is an uncomfortable position, the Krona is weak and inflation is high and renegotiation's of collective agreements are coming up. 

The Krona has depreciated 16% compared to the euro since August last year, and has not been weaker for the past three years. Mr. Gudmundsson says that the CBI is aware of why the Krona is weak. Mostly this is because of payments of foreign loans from domestic parties. It is not possible to refinance these foreign loans on international financial markets. Mr. Gudmundsson says that the situation can be remedied by assisting these parties, and banks in general, to get access to international credit markets again.

 

Source: visir.is

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