The Central Bank of Iceland yesterday confirmed that the Icelandic krona will begin to be traded again on the interbank market today, MBL.is reports.
The Bank’s statement said that the move will encourage a level of normalcy in the value of the krona, as the value of the currency will be determined by the market in the future and not by the sale price of Central Bank daily currency auctions, as has been the case recently.
The shift in the means of trading the krona does not, however, mean that restrictions on its use and trade have yet been abolished.
Gus,
Get ready with the euro accounts… Back to business!
Still not a float. If its trade is restricted it cannot find a “real” value. Who wants a trade-restricted currency?
Then, still it does not float, and damage will take place when floating.
2.5% increase right away. Hmmm not bad.
Now I cannot really explain that unless it’s a bulltrap.
Ok, if the Krona has floated answer me a simple question. What is the exchange rate to the Euro?
Is it 180? As according to Glitnir
http://www2.glitnir.is/Markadir/Gjaldmidlar/GreiningKrossa.aspx?g1=EUR&g2=ISK
or 290 according to the ECB?
http://www.ecb.int/stats/exchange/eurofxref/html/eurofxref-graph-isk.en.html
Or 137, that my bank charges?
https://www.business.barclays.co.uk/BRC1/jsp/brcscontrol?site=bbb&task=ExchangeRatesDetail¤cyCode=EUR
If I visit, am I going to find that I am paying twice the floating price in an already expensive country that has just ramped up its prices in Krona?
If I were exporting to Iceland, do you think I’d accept Krona in this situation?
Jeez +4.5% at 12pm
+8% Now :)
8%
2thumbs up !
I can not understand why Iceland does NOT tell people what the ISK to the EURO rate is. When people travel, they generally like to know the exchange rate of any currency, but according to the internet, there are massively different rate in the ISK and the Euro. Is it OK to ask?: like in Mexico,are there ‘hustlers’ standing on street corners, black market,going psfft! psfft! and giving rates higher than the banks and hotels? Why would I book a hotel, online, at an ISK rate of, I have NO idea? Float the ISK and let it find its own level!
There is still a long way to go, but is going.
I think is going too fast though… That’s very, very dangerous!
We know the currency loans are getting in the financial market by agreement of Sedlabanki.
Is anybody having fresh DATA?
Peter – London
It should be the one from Glitnir, or the other Icelandic banks.
I made an order of transfer with the currency rate of the local bank.
Yes, in today’s installment of the 21st-century saga, a market with three participants, all of them controlled by the Icelandic government, closed with the decision that the euro was worth 7.75% less than the same three market participants were paying for it yesterday. In the meantime, and in real markets, the euro rose slightly against the US dollar and fell slightly against the pound, the two other major trading currencies of Iceland. The European Central Bank declined even to quote a reference rate for ISK trading!
To Peter – London:
>>>>Ok, if the Krona has floated answer me a simple question. What is the exchange rate to the Euro?
>>>>Is it 180? As according to Glitnir
>>>>or 290 according to the ECB?
>>>>Or 137, that my bank charges?
>>>>If I visit, am I going to find that I am paying twice the floating price in an already expensive country that has just ramped up its prices in Krona?
If you are going to visit Iceland, of course you should just buy the ISK before you go at 290, if that rate is indeed still available.
If you are not going to visit, why dont you then just buy ISK at 290 and then sell it right away again at your bank for 137. You will double your money in no time. You can even repeat the circle few times for even more money and make poor Gus look like a fool :-).
Of course, making money is never really this simple. The chances are that either or both of these rates are not really available. But it was a fun thought!
Peter – London said:
“If I were exporting to Iceland, do you think I’d accept Krona in this situation?”
========================================
With that level of knowledge I would recommend that abstain from any foreign business dealings.
Obviously like every other exporter to Iceland you would get paid in the foreign currency, the very same currency that you trade your goods in.
Also the goods would have to be paid for before shipping.
The rate of exchange of the kronur is of no consequence to the foreign trader, it only effects the Icelandic purchaser of the goods.
As I mentioned elsewhere the ECB rate has no bearing on the official bank rate.
The tourist purchases IsKr at the bank rate.
@stan, in Iceland, the “hustlers” were the fishing companies, who were willing to sell hard currency without passing through the Central Bank of Iceland. Articles 4 and 8 of the new rules approved last Friday now prohibit the practice…
Breaking news – faced with being forced into resigning his central bank job, Oddsson is making wild threats:
http://www.icelandreview.com/icelandreview/daily_news/?cat_id=16539&ew_0_a_id=316517
@Physchim62
@stan, in Iceland, the “hustlers” were the fishing companies, who were willing to sell hard currency without passing through the Central Bank of Iceland. Articles 4 and 8 of the new rules approved last Friday now prohibit the practice…
I would die laughing, if it wouldn’t be so sad…
Hustlers? Goddamit, they want to have real money for their real fish, not worthless paper that iceland governmetn SAYS that is worth 150, 160, 180 ISK/EUR.
As I expected, the exporters have shown one big middle finger to the soviet-style currency regulation. And indeed, they are in position to do so. And with new legislation, if it is really enforced, they will just try to hide the transactions even more.
Iceland government is trying to force the only healthy sectors of the economy to sacrifice themselves for the “greater good” – meaning that fishers have to get 1/2 of the export value to bail out icelanders who took insane loans. If I was a fisherman I would be really angry.
My god, do you really think this is the way?
krona win the first battle, can she win the war?
I hope so.
áfran island.
This whole Krona float thing is a joke
it reminds me of the Hc Andersen fairytale about the The Emperor’s New Clothes,
im more interested in seeing if David Oddson will float, all the blubber that has been keeping him above the surface lately seems to be melting away
he is talking himself out of the Central Bank,
hes so popular he needs bodyguards and Police to escort him where ever he goes,
when hes gone we may see some trust in the Krona
until then we just sit back and wait for the show to be over.
Hustlers? A government creates a black market through its price and product controls, and then you blame the fishing companies? It seems the Icelandic government is willing to destroy one of the only profitable businesses left in the country.
“As I mentioned elsewhere the ECB rate has no bearing on the official bank rate.
The tourist purchases IsKr at the bank rate.”
Or in a black market.
The central bank will obviously run out of foreign currency eventually, but with the IMF funds it should last a year or two. All this is not going to encourage tourism to Iceland, I’m at the point of giving up on the idea. The currency is inflated and prices have rocketed, apparently.
The country is looking like its being run by the Mafia as a currency ramping scam.
“The tourist purchases IsKr at the bank rate.”
Right, because the tourist is the only category of buyer that can be fleeced. Good luck finding any bank buying at that rate.
How much are the Iceland importers paying for foreign currency? Or has foreign trade shut down ??
Stan: Are you from Mexico? Is that the only country that you can find “hustlers” and black markets deals?
BJARNI, drink an expresso, or two, and wake up!!
Poor Gusti just made more than 3 million krónurs by selling euros at 186isk at the local market. How many people do you know in this country that got paid 3 millions at the beginning of this month? Then apart of my high salary ( and the money I have been getting in interest). Then I just have 0 debts!!!! I also own land and a house in switzerland and a bungalow on the Canary Islands. All already paid. BJARNI, I´m really far from being poor. But even having more than enough I always follow the tradition of never getting into unnecessary debts and follow a discipline of making my money grow.
Differently, most of the icelanders I know don´t own anything of what they have, they don´t own their houses, they don’t own their cars, they just have HUGE debts… Who is poor Bjarni? tell me, who is poor?… I have lots of money but it does not mean that I waste it.
I save the interests, and I put a minimum of 100.000 isk in my account everymonth. I then live very well, but I manage my money so well ( thanks to my mom’s and grandma’s teachings) that I always have some money left at the beginning of every next month…
Who is poor BJARNI?
Knowless said:
Obviously like every other exporter to Iceland you would get paid in the foreign currency, the very same currency that you trade your goods in.
Also the goods would have to be paid for before shipping.
The rate of exchange of the kronur is of no consequence to the foreign trader, it only effects the Icelandic purchaser of the goods.
Which proves my point, the ISK is worthless outside Iceland. Here, like most countries our currency can be transferred and converted on arrival. Thats how my Dollar wages are paid into the UK, my own bank does the conversion. That situation is impossible for Iceland, not just because goods are priced in dollars or Euro, but because the exchange rate has to be artificially set by the four Icelandic banks.
Paper money depends on the concept of trust, that its of a know value and can be accepted and spent with the same value wherever you are.
The Krona doesn’t have this, so its worthless.
Peter – London said:
“Which proves my point, the ISK is worthless outside Iceland”
=========================================================
What an idiotic irrelevant statement.
That does not mean the ISk is worthless.
If people can trade with Iceland and receive payment for their goods in their own currency, demonstrates that the ISK has value.
It does not demonstrate how much value.
Purchasing capacity of the consumer demonstrates how much value. Trade balance demonstrates overall health.
“Paper money depends on the concept of trust, that its of a know value and can be accepted and spent with the same value wherever you are”
Ever try to change an Ulster Bank note or a Scottish bank note in Finland or Poland?
@Knowless, for a start, Ulster banknotes and Scottish banknotes aren’t even universally accepted within the UK. You prove the point that “it’s a question of trust”: only Bank of England banknotes are generally accepted abroad.
Secondly, I’ll be very interested to see if there are króna notes in Grimsby, possibly the one place outside of Iceland where one might expect to find them. I guess not, and that króna notes are worthless outside of Iceland: within Iceland, their official value is determined by the government while the real value (determined by their holders) seems somewhat lower.
@Physchim62
Maybe indeed you may find a krona note in Grimsby, as Iceland has strong ties with fish supplies to Grimsby.
You could try asking in The Kent Arms Bar or The Rainbow Bar on Freeman Street…
Ask for a lovely lady called LINDA….
Lets just say she serviced many a happy Icelandic Fisherman …She could quiet possibly have received payment in Icelandic Krona..
Knowless:
“If people can trade with Iceland and receive payment for their goods in their own currency, demonstrates that the ISK has value.”
Traders receive payment in Euro’s demonstrates their confidence in the ISK?
And I’m the idiot?
If inflation soars, this can improve on tourism and exports
the question is, that products exported iceland apart from fish?
, Peter – London said:
Knowless:
“If people can trade with Iceland and receive payment for their goods in their own currency, demonstrates that the ISK has value.”
Peter – London replies
“Traders receive payment in Euro’s demonstrates their confidence in the ISK?
And I’m the idiot?”
=============================================================
Carefull now, I referred to the statement, not you personally.
Who said anything about a traders confidence in the IsKr?
Not me.
Trade confidence is sealed by the exporter to Iceland getting paid according to the contract.
If trust is an issue, get paid up front.
Why should a trader care if its 150kr or 200kr or 250 kr to the GBP.
If someone in the UK is exporting to Lithuania,
do you think the UK exporter cares about the exchange rate of the lita/gbp?
The UK exporters only real concern is to receive a direct payment in GBP and let the Lithuanian importer worry about the exchange value of the currency.
Does anybody know, how much money can you withraw on POS terminal at the bank, or on ATM with maestro card, or Mastercard of foreign bank on Iceland?
I plan to take 5000 EUR to Iceland in January. does anyone want to sell me ISK with a good rate? make your offers.
I’m interested in buying Icelandic kronas for the right price.
HI ESTONIAN!! 5000 EUROS? YOU WILL BE ABLE TO BUY AN APARTMENT DOWNTOWN REYKJAVÍK WITH INCREDIBLE VIEWS WITH THAT MONEY IF YOU WAIT UNTIL THE END OF JANUARY… WHEN 1 EURO GETS TO 1000 ISK….
MAYBE I CAN HELP YOU WITH YOUR 5000 EUROS… I HAVE TO CHECK FIRST HOW TO DO IT IN A LEGAL WAY, I JUST DON’T WANT PEOPLE TO THINK I AM SOMEONE FROM THE GOVERNMENT :D