Highlights from the Central Bank of Iceland Balance Sheet

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The following data are from the Central Bank of <'xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Iceland's Balance Sheet as at the end of May 2003 with comparative figures for the end of December 2002 and changes within the month and from the beginning of 2003.

The Central Bank's foreign reserves decreased by 1.6 b.kr. from the previous month and amounted to 36.9 b.kr. at the end of May (equivalent to 518 m. US dollars at the exchange rate at the end of the month). Foreign short-term liabilities decreased by 1.2 b.kr. during the month and amounted to 9.9 b.kr. at the end of May.

In May, the Central Bank purchased currency in the domestic interbank market for 2.8 b.kr., which is consistent with the measures to strengthen its external position as described inter alia in the May issue of the Bank's Monetary Bulletin. Despite the currency purchases, the foreign reserves declined, as a result of Treasury loan movements, a decrease in the Bank's foreign short-term liabilities and the strengthening of the króna by just over 1% in May.

Market value of listed securities in the Bank's portfolio was 4.3 b.kr. at the end of May. Of this figure, listed Treasury securities amounted to 1.2 b.kr.

Central Bank claims on deposit money banks declined by 4.7 b.kr. in May and amounted to 66.3 b.kr. at the end of the month. Claims on other financial institutions went down by 0.5 b.kr. to 7.9 b.kr. at the end of the month.

Net claims on central government rose by 0.1 b.kr. in May and the Treasury's net deposit at the end of the month stood at 25.8 b.kr.

Base money decreased by 4.2 b.kr. during the month and amounted to 32.6 b.kr. at the end of May.

For further information, contact the Governors of the Central Bank of Iceland and Erla Árnadóttir, Chief Accountant, tel. (+354) 569-9600.

	Central Bank of Iceland Balance Sheet
	in million kr.

	<'xml:namespace prefix = v ns = "urn:schemas-microsoft-com:vml" />End of period		Changes in 2003
	December	May	From beginning	In
Assets :	2002	2003	of year	May

Foreign reserves	37,194	36,924	-271	-1,575
Listed securities	5,260	4,286	-974	-535
Treasury	1,816	1,194	-622	10
Other	3,445	3,092	-353	-544
Claims on DMBs	69,141	66,255	-2,886	-4,703
Claims on other financial institutions	8,227	7,890	-337	-477

Liabilities:

Foreign short-term liabilities	16,499	9,857	-6,642	-1,203
Notes and coin	9,590	9,669	80	248
Sight deposits of DMBs	1,164	1,593	429	-459
Required reserves of DMBs	21,837	21,371	-466	-3,993
Ordinary deposits of other financial institutions	75	11	-64	-86
Required reserves of other financial institutions	1,258	672	-585	-40

Memorandum items:
External reserve, net	20,696	27,067	6,371	-372
Claims on central government, net	-20,846	-25,830	-4,984	55
Other claims, total	77,454	74,253	-3,201	-5,181
Base money	32,590	32,633	43	-4,203

Definitions

Foreign reserves: Total currency assets of the Central Bank. Listed securities, Treasury: Assets in the form of Treasury bonds, Treasury bills and Treasury notes. Listed securities, Other: Housing bonds and housing authority bonds. Claims on DMBs: The Bank's net claims on deposit money banks. Claims on other financial institutions: Net claims. Foreign short-term liabilities: Occasional short-term borrowing by the Central Bank, for purposes including to strengthen its foreign reserves. Notes and coin: Total notes and coins in circulation outside the Central Bank. Sight deposits of DMBs and other financial institutions: Deposits in current accounts with the Central Bank. Required reserves of DMBs and other financial institutions: Reserves that these institutions are obliged to maintain with the Central Bank in accordance with requirements set by the Bank.

Memorandum items. External reserve, net: Foreign current assets less foreign current liabilities. Claims on central government: i.e. liabilities of these entities towards the Central Bank less their deposits with it. Other claims, total: Total claims on other institutions than central government. Base money: Notes and coin in circulation, and deposits and reserves of DMBs with the Central Bank.

No. 9/2003

June 5, 2003