03 November 2006

Borrowing to strengthen the foreign reserves


In recent months, the Ministry of Finance and Central Bank of Iceland have been engaged in discussions on strengthening the Central Bank’s foreign reserves. The Icelandic financial sector has expanded significantly in recent years and foreign investors have become active in domestic trading. Both these developments give grounds for strengthening the Central Bank’s external position.

On behalf of the Ministry of Finance, the Central Bank has mandated Barclays Capital, Citigroup and Dresdner Kleinwort to begin preparations for issuance in the euro markets. The entire amount of the planned borrowed funds will be allocated towards strengthening the Central Bank’s foreign reserves. The issue will be launched following a roadshow.

For further information, contact the Governors of the Central Bank of Iceland or Mr. Sturla Pálsson, Director of the International and Market Operations Department, tel. 569-9600.

No. 40/2006
November 3, 2006