Maybe you’re travelling to the US, or anywhere else that might accept its currency. Maybe you want to try your hand at gaming the economic yo-yo of currency trading. Or maybe you just like the look, design or smell of American money. Whatever your reasons, you should probably know a thing or two about buying US dollars before you proceed.
For starters, the rules about buying dollars aren’t just a matter of bank policy—they’re enshrined in law. Specifically, it’s detailed in Act No. 127/2011 amending the Foreign Exchange Act, the Customs Act and the Act on the Central Bank of Iceland. As the name of this law suggests, there have always been restrictions and regulations when it comes to buying foreign currency, even before the 2008 bank collapse. However, pre-crash it had more to do with the buying and selling of foreign securities. After the crash, things got a lot more restrictive.
These restrictions were eased somewhat in November 2009, but there’s still a cap on how much foreign currency you can buy, and a few other provisions have been tossed in for good measure, supposedly to help keep the Icelandic króna stabilized and prevent everyone from buying up metric tonnes of dollars in the hopes of becoming filthy rich when it does.
So what are these regulations, exactly?
First of all, Article 13 d. of the act states that if you’re buying foreign currency, it better be because you’re travelling. To wit: “At purchase or withdrawal an individual shall demonstrate the proposed trip by presenting a ticket or receipt for payment of his scheduled travel within four weeks.” If you happen to be a crewmember of an airplane, you can just show the bank your travel itinerary instead.
Second, you can only buy so many dollars, and you’re restricted as to how often you can do so. Specifically, the bank will see to it that nobody purchases or withdraws “foreign currency in cash for an amount equivalent to more than 350,000 kr. [$2,800 USD] on the purchase- or withdrawal date for each person under paragraph 1 per calendar month.”
Third, if you’re an Icelandic resident and will be living abroad for more than one month, but less than six months, you can transfer that dollar amount from Iceland to yourself once a month.
In all cases of travelling outside of Iceland with American dollars, you—and only you!—are allowed to be carrying those dollars. So if you bought two grand and intend to take it out of Iceland, be sure to keep it in no one else’s luggage but your own.
It’s expected that these restrictions will ease as the economy recovers. And the economy won’t recover if you keep dumping Icelandic króna on the market, so do refrain from buying thousands of dollars each month, if at all possible. Thanks.