The last part of the bilateral loan from the Nordic countries to Iceland agreed to in connection with the economic stabilization program of the International Monetary Fund (IMF) and Iceland, which was completed last year, was paid out on December 30.
Archive photo by Icelandic Photo Agency.
The amount of EUR 887.5 million (ISK 141 billion) was added to the Central Bank of Iceland’s currency reserves, ruv.is reports.
The Icelandic state treasury is responsible for EUR 647.5 million of the loan, provided by Denmark, Sweden and Finland, and the Central Bank for EUR 240 million, which was provided by Norway.
According to the Central Bank of Iceland, given the uncertainty in global financial markets and that surrounding prospective capital account liberalization in Iceland, it is important for the country to maintain sizeable foreign exchange reserves in spite of the associated expense.
It is hoped that, as conditions change, it will be possible to scale down and deleverage the reserves.