Swap Contracts Have Positive Influence on ISK Skip to content

Swap Contracts Have Positive Influence on ISK

The ISK appreciated by 4.5 percent on Friday morning following an announcement by the Central Bank on currency swap contracts with the central banks of Denmark, Norway and Sweden. The purpose was to strengthen Iceland’s foreign currency reserves.

According to Morgunbladid, the contracts give the Central Bank access to EUR 1.5 billion (USD 2.3 billion).

Some Norwegian media reports have claimed Iceland is being granted an emergency loan, but Iceland’s Central Bank director Davíd Oddsson dismissed such claims.

As a consequence of the Central Bank’s actions the selected share index rose while the banks’ credit default swaps (CDS) decreased by 50 to 55 points when the OMX-NASDAQ Nordic Stock Exchange in Iceland opened on Friday morning.

The CEOs of Iceland’s three largest commercial banks Kaupthing Bank, Glitnir Bank and Landsbanki Bank were satisfied with these measures taken by the Central Bank and believe it will have a continued positive influence on the market.

Click here to read more about this story in The New York Times and here to read more about the economic situation in Iceland.

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