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Iceland Will Lift Remaining Capital Controls in Place Since 2008 Crash Iceland Will Lift Remaining Capital Controls in Place Since 2008 Crash
(35 minutes later)
STOCKHOLM — Iceland’s finance ministry said on Sunday that in the coming week it would lift the remaining capital controls that have been in place since the financial crisis in 2008, easing restrictions on households and businesses.STOCKHOLM — Iceland’s finance ministry said on Sunday that in the coming week it would lift the remaining capital controls that have been in place since the financial crisis in 2008, easing restrictions on households and businesses.
“The removal of the capital controls, which stabilized the currency and economy during the country’s unprecedented financial crash, represents the completion of Iceland’s return to international financial markets,” the ministry said in a statement.“The removal of the capital controls, which stabilized the currency and economy during the country’s unprecedented financial crash, represents the completion of Iceland’s return to international financial markets,” the ministry said in a statement.
The changes, which are to take effect on Tuesday, will affect individuals, companies and pension funds. The government started to dismantle capital controls last year by easing restrictions for local residents.The changes, which are to take effect on Tuesday, will affect individuals, companies and pension funds. The government started to dismantle capital controls last year by easing restrictions for local residents.
Iceland’s central bank said in a separate statement that it had entered an agreement to purchase offshore assets for close to 90 billion Icelandic krona (about $836 million) at an exchange rate of 137.5 krona per euro.Iceland’s central bank said in a separate statement that it had entered an agreement to purchase offshore assets for close to 90 billion Icelandic krona (about $836 million) at an exchange rate of 137.5 krona per euro.
Iceland has been locked in a dispute with funds that owned more than $1 billion worth of krona-denominated assets that had been frozen by the Icelandic authorities.Iceland has been locked in a dispute with funds that owned more than $1 billion worth of krona-denominated assets that had been frozen by the Icelandic authorities.
The central bank said that remaining offshore krona holders would be invited to sell their assets to the central bank at the same exchange rate over the next two weeks.The central bank said that remaining offshore krona holders would be invited to sell their assets to the central bank at the same exchange rate over the next two weeks.
The finance ministry said holders that did not sell would not be able to move their assets.The finance ministry said holders that did not sell would not be able to move their assets.
The funds have waged a fight in Icelandic courts and at the European Free Trade Association’s Surveillance Authority to obtain a better rate than Iceland offered investors in an auction last year.The funds have waged a fight in Icelandic courts and at the European Free Trade Association’s Surveillance Authority to obtain a better rate than Iceland offered investors in an auction last year.
The ministry said it had also adjusted regulations and introduced special reserve requirements for new foreign currency inflows to prevent a repeat of “hot money” — a term referring to funds in search of short-term returns — destabilizing the financial system.