Prime Minister Geir H. Haarde said yesterday that Iceland might as well adopt the US dollar instead of the euro—if joining a monetary union became absolutely necessary—since Icelandic businesses trade with US companies to a great extent.
Haarde said the euro was not necessarily the default currently to adopt. Other currencies are just as valid, he stated, like the British pound sterling and other Nordic currencies, Fréttabladid reports.
The currency rate of the ISK dropped rapidly this month until yesterday when it appreciated slightly again. Many have called for adopting a new currency, preferably the euro; others blame the commercial banks for making the ISK fluctuate to earn more money on paper at the end of the year.
CEO of Glitnir Bank Lárus Welding dismisses such claims. “The banks are not involved in speculation with the ISK. It is the smallest currency in the world and the interest of foreign investors in the ISK is declining.”
“We have no vested interests in that. Our interests lie in a stable currency and low interest rates,” Welding concluded.
Click here to read about the prime minister having faith in the ISK.