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  • Effective today, Iceland is gonna return to the international market.

  • The government announced that it would lift almost all of the remaining capital controls,

  • allowing its citizens, corporations, and pension funds full access to global capital markets.

  • That puts an end to an 8 year struggle to clean up after the 2008 banking collapse.

  • For more, let's bring in Bloomberg news reporter Omar Valdimarsson, he's in Reykjavík Forest.

  • Omar, great to have you on the program, so where will Iceland go from here?

  • Some signs, it seems that the economy of Iceland is doing pretty nicely thank you right now.

  • It sure is, thank you. And it would be interesting to follow the next few days for in terms of what would happen.

  • You'll see, whether we'll see a lot of volatility in the Krona, or whether Icelandic treasury bonds and the index bonds are gonna be

  • very volatile, and what traders are gonna do about it.

  • So it's starting to kind of be an interesting time to follow.

  • Do you think that, obviously the treasury in Iceland are fully prepared for that kind of volatility that might come in,

  • and I suppose really what the market wants to know is,

  • is this absolute removal, complete removal of all capital controls?

  • Money free in, money free out.

  • Not completely. There are some roadblocks.

  • Iceland started with the try to prevent the unification of the candidate,

  • which basically had a lot to do with the collapse in 2008.

  • And there are some remnants that are still left in the process

  • for US funds are still locked in the capital controls, but they have about two weeks to negotiate with the government if they want to get out in this go.

  • It seems amazing 8 years after the crisis, Omar, seems amazing now that the government

  • hopes that these moves the removal of these capital controls will ease pressure on the currency to appreciate

  • what has been driving that currency so much stronger over recent ten months.

  • Well, tourists arrivals have been astronomical in Iceland.

  • We've gone from about 500,000 tourists to a projection of 2.3 million this year.

  • And you know, there's only 340,000 people living here, so that just puts a huge pressure on a lot of services and lost of period(?) instead of being ______ island(?)

  • And obviously, in return, the currency is well.

Effective today, Iceland is gonna return to the international market.

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A2 iceland capital omar removal currency volatility

Iceland Ends Capital Controls to Help Economy Recover

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