Iceland Lifting Remaining Capital Controls

Prime Minister, Bjarni Benediktsson, along with the Ministry of Finance have announced that Iceland will be lifting remaining capital controls as of tomorrow, reports RÚV.

“We’ve reached an incredibly enjoyable milestone in our economic development since the financial crisis of 2008 and 2009,” Bjarni told reporters at a press conference yesterday. Adding that the restrictions had been effecting citizens, pension funds and companies alike since their implementation.

“The removal of the capital controls, which stabilised the currency and economy during the country’s unprecedented financial crash, represents the completion of Iceland’s return to international financial markets,” reads a statement from the Ministry of Finance.

In the last year, the government and Central Bank of Iceland have incrementally eased restrictions, rather than drop them all at once, in an effort to protect the currency.

“Iceland’s careful, measured approach to lift capital controls was developed and approved with domestic and international support,” Benedikt Johannesson, Minister of Finance, told the BBC.

In a separate statement, Iceland’s Central Bank explained that it had entered an agreement to purchase offshore assets for close to 90 billion ISK (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 ISK-denominated assets, frozen by the Icelandic authorities through capital controls.

The Central Bank’s statement also noted that remaining offshore ISK holders would be invited to sell their assets to the Central Bank at the same exchange rate over the next two weeks. Those who do not sell, will not be able to move their assets.

The funds have fought hard, both in Icelandic courts and at the European Free Trade Association’s Surveillance Authority in order to get a better rate, but alas.