The exchange rate index of the Icelandic króna ended in 231 points yesterday—the ISK hasn’t been stronger in comparison to the euro since late July last year. This development might lead to a lower policy rate in Iceland.
The Icelandic króna. Copyright: Icelandic Photo Agency.
The euro and the foreign currencies that are connected with it, including the Danish króna, make up half of the exchange rate index of the ISK.
Jón Bjarki Bentsson, a specialist at the analysis department of Íslandsbanki, told Fréttabladid that this development is good news, especially considering products from the euro zone will become less expensive. He also believes it could lead to the Central Bank further lowering the policy rate.
“It is difficult to make predictions on currencies. But I think it is more likely now than a few months ago that the króna will outlive the winter and slowly move upwards,” Bentsson commented.
Click here to read more about the policy rate.