The Icelandic króna appreciated by 8.2 percent after markets closed yesterday and the exchange rate index rose to 229.6 points. The króna has never appreciated so much in one day since it was first floated in 2001.
“This experiment which began today [yesterday] looks promising. Predictions that the króna would weaken considerably in the first day of trade have not come true. On the contrary the króna has strengthened and even considerably so,” Prime Minister Geir H. Haarde said at a press conference yesterday. Morgunbladid reports.
Haarde reminded reporters that himself, Foreign Minister Ingibjörg Sólrún Gísladóttir, the Central Bank and others had claimed that the exchange rate of the króna had been far too low recently.
It appears as if there was more supply than demand of foreign currency yesterday and therefore the exchange rate of foreign currencies dropped compared to the Icelandic króna.
Yesterday, EUR 1 cost around ISK 173.
The Icelandic króna is expected to appreciate further in the coming days with flow of products and the estimated trade surplus in November taken into account.
Click here to read more about the latest development of the Icelandic króna.
Copyright of photo: Icelandic Photo Agency.