Reykjavík Court Rules on Foreign Exchange Loans Skip to content

Reykjavík Court Rules on Foreign Exchange Loans

Reykjavík District Court announced on Friday that the Central Bank’s most beneficial non-indexed interest rates are to replace foreign currency indexation and the interest rates that were originally agreed upon in the case of car loans.

Copyright: Icelandic Photo Agency.

“I find this ruling relatively fair and I believe this is a conclusion that both parties can hopefully be content with,” Minister of Finance Steingrímur J. Sigfússon told Fréttabladid after a meeting with representatives of the Central Bank and the Financial Supervisory Authority on Friday evening.

The ruling will be appealed to the Supreme Court. Sigfússon said that even though the Supreme Court will come to the same conclusion, there is still considerable uncertainty surrounding the settlement of various agreements.

The minister pointed out that the vast majority of foreign currency loans were granted to companies and those loan agreements are to various degrees different from the agreements on car loans to which the ruling applies.

“It is a jungle to sort everything out and people cannot yet comment on what precedent the past rulings might have set,” Sigfússon added.

Click here to read more about the foreign currency loans and related articles.

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