18 May 2017

Central Bank suspends regular foreign currency purchases

Central Bank of Iceland

With reference to announcements to that effect, the Central Bank of Iceland has since 2002 bought foreign currency from market makers in the foreign exchange market, albeit with several pauses, both to enable the Treasury to service its foreign debt and to support the foreign exchange reserves. In the recent term, the Bank’s regular purchases have totalled 6 million euros per week. In 2016, they totalled 312 million euros, the equivalent of 41.7 b.kr. This accounted for 11% of the Bank’s net foreign exchange purchases in the market during the year. The Bank’s large-scale purchases in recent years have led to a sizeable increase in the reserves, which means that there is no need to continue these regular purchases at present. They will be suspended beginning next week.

As before, the Central Bank will intervene in the foreign exchange market in accordance with statements made by the Monetary Policy Committee.

Further information can be obtained from Governor Már Gudmundsson, at tel: +354 569-9600.



18 May 2017