PM: Icelandic Króna “Strongest And Most Stable” Currency In The World

Prime Minister Sigmundur Davíð Gunnlaugsson contends Iceland’s currency is not just good; it’s the best.

Stundin reports that in an interview on radio station Bylgjan, the PM was told that many have complained about the high interest rates in Iceland, which are often blamed on the króna. Sigmundur Davíð was having none of it.

“Then I would point out, as many have pointed out, that we actually have the strongest and most stable currency in the world, which is the indexed króna,” he said.

He then compared the Canadian dollar, unfavourably, to the Icelandic króna, saying that if one were to take out a loan in krónur or dollars, the dollar would be more unstable.

While it is true that the króna has been relatively stable in recent years, this is only since capital controls were put in place. According to data from Iceland’s Central Bank, the króna has fluctuated greatly between 1995 and 2010. In fact, only Brazil, South Africa and Turkey have currencies that have shown greater levels of fluctuation than the Icelandic króna.

Most interesting, at least regarding the Prime Minister’s praise of the indexed króna, is that one of his campaign promises in the 2013 election season was to do away with indexing.