13 January 2017

Offshore króna assets as of end-2016

Central Bank of Iceland

At the end of 2016, the stock of offshore króna assets amounted to 191 b.kr., after declining by just over 128 b.kr. since 31 March 2016. At the year-end, the offshore stock consisted largely of Treasury bonds, Treasury bills, and other Government-guaranteed securities (105.6 b.kr.); cash and Central Bank certificates of deposits (72.7 b.kr.); and other types of assets (12.8 b.kr).

The Act on the Treatment of Króna-Denominated Assets Subject to Special Restrictions, no. 37/2016, entered into force on 22 May 2016. The Act provided for segregation on offshore króna assets, as well as their transfer to administrative accounts with the Central Bank and to accounts subject to special restrictions. The explanatory notes accompanying the bill of legislation preceding the Act contained an assessment of the total scope of offshore króna assets as of 31 March 2016, based on analysis carried out by the Central Bank. At that time, the stock of offshore króna assets was estimated at 319.1 b.kr. In June 2016, the Bank held a foreign currency auction for owners of offshore krónur, in which bids were accepted for a total of 82.9 b.kr. In addition, owners of offshore króna assets were authorised to conduct foreign exchange transactions with the Central Bank at the reference exchange rate, ISK 220 per euro, until 1 November 2016. Some 15.5 b.kr. were exchanged in this manner. After adjusting for these transactions, as well as for interest payments, re-examination of segregation, and the market value of the assets, the stock of offshore króna assets totalled 191 b.kr. at the end of 2016.

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



No. 2/2017
13 January 2017