On 12 January 2012, the Central Bank of Iceland offered 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 30 0701. The two auctions, which took place between 10:00 hrs. and 11:00 hrs. today, were 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.

The Central Bank offered to purchase up to a maximum of 100 million euros in the two auctions combined. The Central Bank reserved the right to raise or lower the auction amount.

In all, 77 bids totalling 173.6 million euros were submitted, and bids in the amount of 141.3 million euros were accepted. The auction was structured with a single-price format, so that all accepted offers were made available to primary dealers at the same price, which was set at 240.00 kr. per euro. Due to excess demand in the auction, bids submitted at 240 kr. per euro were reduced pro rata by 50%.

 Key figures

 Total

 RIKS 30 0701

 Investment Programme

 Number of bids

 77

 38

 39

 Total amount, EUR

 173.6 m

 114.5 m

 59.1 m

 Accepted bids, EUR

 141.3 m

 82.2 m

 59.1 m

Investors selling foreign currency according to the Treasury bond option will receive indexed RIKS 30 0701 bonds as payment. Bonds sold in the series totalled 17.1 b.kr. nominal value.

As payment for foreign currency sold, investors participating in the Investment Programme will receive Icelandic krónur for long-term investment in the Icelandic economy. Euros purchased in the auction totalled 14.2 b.kr.

No. 6/2012

15 February 2012