Icelandic Króna Could Strengthen in Spring Skip to content

Icelandic Króna Could Strengthen in Spring

The ISK could get stronger in the spring, says a report from the Analytical Department of Íslandsbanki bank. The report states that improving international economy, recovering domestic economy and increased trust of domestic and foreign investors in the country’s economy, financial system and the ISK could strengthen the ISK.

However the report states that the ISK faces a difficult time in the beginning of the New Year because of payments of interest to foreign deposit owners.

Trade deficit is traditionally low over the winter months but higher prices for export products will weigh against that because of the extremely weak ISK.

Uncertainty regarding how fast and what methods will be used by the Central Bank of Iceland to lift the currency restrictions will measure heavily in how the ISK fares. “We think it is likely that the process [in lifting the currency restrictions] will be slow and in the end the restrictions could prove more tough-lived than they were meant to be in the beginning, in spite of the economic waste and loss of trust internationally such restrictions cause,” says the report of Íslandsbanki.

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