The Executive Board of the International Monetary Fund (IMF) approved yesterday its forth review of the economic recovery program negotiated by the IMF and the Icelandic government after the banking collapse in 2008.
Copyright: Icelandic Photo Agency.
The review enables the disbursement of the fourth part of the IMF’s bailout loan to Iceland, ISK 19 billion (USD 160 million, EUR 124 million).
The review is also expected to ensure financing assurances from the Nordic countries, a press release from the Icelandic Ministry of Economic Affairs states.
“The approval of the review is an important milestone,” said Minister of Economic Affairs Árni Páll Árnason.
“We appreciate the positive feedback from the fund regarding the disciplined austerity measures put forth by the government and our handling of economic policy. By accelerating private debt restructuring we pave the way for economic recovery in the coming months and further strengthen the financial sector,” he added.
Upon the conclusion of the review, the Icelandic government sent the IMF a new letter of intent, describing Iceland’s economic policy.
The letter addresses that an economic recovery is gradually taking hold, apparent by the continued stability of the króna, a declining debt path, and falling inflation.
Trade surpluses have allowed authorities to begin purchases of foreign currency to bolster reserves. Recent indicators suggest that demand is slowly picking up, and growth is expected to be positive in 2011.
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