“For now we’re sticking with the króna and when I say ‘for now’ I’m talking about the foreseeable future,” Iceland’s Prime Minister Sigmundur Davíð Gunnlaugsson said in an interview with Bloomberg yesterday. “Iceland’s economic recovery is bound up with the króna.”
Photo: Páll Kjartansson/Iceland Review.
The króna has appreciated nine percent against the euro over the past 12 months, Bloomberg reports. Still, today’s rate of about 157 per Euro compares with an average of 88 in 2007, a year before the financial collapse.
Sigmundur Davíð also said that once long-term stability was in place, the government would be able to make a decision on the future of the currency. The Prime Minister argued that bank creditors will gain the most if they complete settlements without disrupting the economy.
“These investors – most of them came in after the economic collapse – could cash in on their investment and in many cases multiply their investment,” he said, adding that that would allow the government to lift capital controls.