25 May 2016

Central Bank of Iceland foreign currency auction 16 June 2016

Central Bank of Iceland

The Central Bank of Iceland hereby offers to purchase krónur in exchange for cash payment in foreign currency. More specifically, the Bank is offering to buy krónur defined as offshore krónur according to Act no. 37/2016. The auction will take place on Thursday 16 June 2016. It will begin at 10:00 hrs. and last until 14:00 hrs. that same day. The auction is part of the comprehensive action plan to lift the capital controls; cf. the Government and Central Bank’s capital account liberalisation strategy of 8 June 2015.

In instances where Treasury bonds, Treasury bills, or Housing Financing Fund bonds are used as payment for the foreign currency in the auction, the repurchase price will be published on 10 June 2016.

The auction is structured with a single-price format; i.e., all accepted offers will be offered to investors at the same price. The price for euros sold in the auction will be determined by auction participation, as is set forth in the following table:


Amount of offshore króna assets offered for sale Auction price

 0 kr. – 50,000,000,000 kr.

 210 kr. per euro

 50,000,000,001 kr. – 75,000,000,000 kr.

 205 kr. per euro

 75,000,000,001 kr. – 125,000,000,000 kr.

 200 kr. per euro

 125,000,000,001 kr. – 175,000,000,000 kr.

 195 kr. per euro

 175,000,000,001 kr. or more

 190 kr. per euro


Commercial banks and securities depositories that have deposit accounts with the Central Bank of Iceland and have concluded an intermediation agreement with the Central Bank will act as intermediaries for participation in the auction by owners of offshore króna assets (a list of parties that have already concluded intermediation agreements with the Central Bank can be found below). 

The deadline for submittal of offers is at 14:00 hrs. on 16 June 2016. Further information on the auction can be found in the Terms of Auction.

Settlement of auction transactions will take place on 29 June 2016.

It should be noted that the 16 June 2016 auction will be the last auction in which owners of offshore krónur will be invited to purchase foreign currency before the authorities begin lifting controls on residents: pension funds, other legal entities, and individuals.

Further information can be obtained from Már Guðmundsson, Governor of the Central Bank of Iceland, at tel: +354 569-9600.

Entities that have concluded intermediation agreements:

Arion banki hf.
Clearstream Banking S.A.
Euroclear Bank S.A./N.V.
Íslandsbanki hf.
Kvika banki hf.
Landsbankinn hf.


Terms of Auction - for the purchase of Icelandic krónur by the Central Bank of Iceland in exchange for euros. Transaction date: 16 June 2016:

Terms of Auction for the purchase of Icelandic krónur by the Central Bank of Iceland in exchange for euros (Amended 13 June 2016)

 No. 10/2016
25 May 2016