Iceland’s fearsome inflation rate has begun to ease, according to preliminary February figures released yesterday.

Reuters reports that the CPI reduced to an annual 17.6 percent over the month from a peak of 18.6 percent in January. Read the full story

Gylfi Magnusson, Icelandic Minister of Commerce believes the time may have come to negotiate with foreigners clamouring to cash in their Icelandic krona Glacier Bonds for foreign currency, and instead offer sections of the foreign assets of Icelandic banks and pension funds. Read the full story

The Central Bank of Iceland (CBI) has still not needed to use any of the International Monetary Fund (IMF) loan to the country to stabilise the rate of the Icelandic krona, visir.is reports. Read the full story

The International Monetary Fund (IMF) is happy with Iceland’s progress in stabilising its economy, Poul Thomsen said in a press conference yesterday at the end of his team’s first inspection visit to the country. Read the full story

PRESS RELEASE FROM THE CENTRAL BANK OF ICELAND:

The Board of Governors of the Central Bank of Iceland has decided to increase the spread between the Bank’s highest and lowest interest rates. Interest rates on financial institutions’ current accounts with the Central Bank will be reduced from 17.5% to 15% effective December 21, interest on overnight loans will rise from 20% to 22% effective December 18, and interest on certificates of deposit and term deposits will be reduced from 17.75% to 15.25% effective December 29. Read the full story

After trading very well over recent days, the Icelandic krona has weakened slightly today, in trading New Glitnir describes as “very light”. Read the full story

Geir H. Haarde, the Icelandic Prime Minister, said that hope was rekindled yesterday when the Icelandic krona was traded on the international market for the first time since the banking collapse in early October, according to MBL.is. Read the full story

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.

Editorial comment from IceNews:

The Icelandic krona began its “managed refloat” on Friday – and celebrated on Monday with a spectacular belly flop, gasping for air and struggling not to drown. It is only fair to point out, however, that yesterday saw a marked levelling-out, with only slight changes in both directions.

Meanwhile, also on Monday, a thousand people celebrated the 90th anniversary of Icelandic nationhood by demonstrating against the incumbent government and central bank board on the beautiful Arnarholl hill, right outside the Central Bank of Iceland. Iceland gained total home rule 90 years ago, but only gained total independence from Denmark in 1944.

After the rally, nearly a hundred of the protesters went into the central bank itself to have a little chat with governor David Oddsson; but riot police happened to be manning reception at the time. Read the full story

It is difficult to say with any certainty by how much the Icelandic krona will depreciate in value, if at all, when it is re-floated, according to Gylfi Zoega, head of the economics department at the University of Iceland. It is likely the currency will be floated before the New Year. Read the full story