The króna appreciated by 0.7% from the beginning to the end of 2025. Total turnover in the interbank foreign exchange market increased year-on-year. Owing to turmoil in global financial markets, movements in the exchange rate of the króna differed across currencies For example, the króna weakened versus the euro but strengthened significantly against the US dollar. Fluctuations in the exchange rate were not large in international context, even though they increased relative to the prior year. The Central Bank’s largest foreign currency purchases since 2017 took place in 2025. The Bank’s purchases during the year totalled 68 b.kr. (473 million euros), most of them via a regular purchase programme that began in April and continued until December. The interest rate differential with abroad remained largely unchanged, as was the stock of foreign-owned Icelandic Government bonds at year-end. The pension funds bought less foreign currency in 2025 than in previous years. Forward position-taking with the króna increased as 2025 advanced, after having declined from mid-year 2024 onwards. The Treasury issued a eurobond for 750 million euros in 2025, and the interest rate spread on foreign bonds issued by the Treasury and the commercial banks narrowed. At the year-end, the Bank’s international reserves totalled 968 b.kr., or 20% of GDP.
No. 1/2026
22. January 2026