Iceland and China Make Foreign Exchange Contract Skip to content

Iceland and China Make Foreign Exchange Contract

The Central Banks of Iceland and China have made a foreign exchange contract which will be signed by Már Gudmundsson, director of the Central Bank of Iceland, and Hu Xiaolian, assistant director of the People’s Bank of China, at the Icelandic Ministry for Foreign Affairs before noon today.

The Cental Bank of Iceland. Copyright: Icelandic Photo Agency.

According to, the agreement is worth ISK 66 billion (USD 503 million, EUR 421 million). The amount has just been confirmed on the website of the Central Bank of Iceland.

Minister of Economic Affairs Gylfi Magnússon told that the agreement will improve the Icelandic Central Bank’s access to foreign currency and the Icelandic economy as a whole. It also opens up other trade opportunities with China.

Magnússon said the agreement can be interpreted as a declaration of trust from China. “Yes, I consider it to reflect their evaluation of the situation here. It is obvious that they have faith in such an agreement.”

The Central Bank of Iceland last made foreign exchange contracts with the Central Banks of Norway, Denmark and Sweden in May 2008, worth a total of EUR 1.5 billion (ISK 235 billion, USD 1.8 billion).

In the autumn of 2008, the Federal Reserve System in the United States made a comparable agreement with all of the Nordic countries, except for the Central Bank of Iceland, although Iceland had requested to be part of the agreement.

China is said to have been positive towards Iceland since the banking collapse, for example by supporting Iceland’s cause when it was put before the International Monetary Fund.

Today’s agreement is signed on the occasion of the visit of He Guoqiang, secretary of the central commission of the Chinese Communist Party.

During his stay, He will meet with President of Iceland Ólafur Ragnar Grímsson, Prime Minister Jóhanna Sigurdardóttir and Minister for Foreign Affairs Össur Skarphédinsson.

He will also sign a declaration of intent with Landsvirkjun, the National Power Company, on participation in tender offers for power plants in Iceland and an agreement with Enex China on continued cooperation with power plants in China.

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