Icelandic króna lower on "hard landing" prediction from Fitch Skip to content

Icelandic króna lower on “hard landing” prediction from Fitch

By Iceland Review

Kaupthing (KB-Bank) reported yesterday in its 4:30 pm daily bulletin that Fitch Ratings representatives claimed that the Icelandic economy was heading for a “hard landing”, and that the Central Bank needed to raise interest further to keep inflation in check. They also predicted declining asset prices and, possibly, the further depreciation of the Icelandic króna.

Kaupthing reports that the comments “probably contributed to” the 1.4 per cent decline of the króna yesterday.

Kaupthing also reported a new issue of ISK denominated bonds by the the German fund KFW for the amount of ISK 5 billion. The issue could “support” the króna, said Kaupthing.

According to Kaupthing, the Icelandic stock market index fell yesterday by 2.5 per cent, and yields on index linked bonds moved higher in “heavy trading”.

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