Icelandic krona strengthens on first trading day

geir-h-haarde1Geir 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

The value of the krona increased by an average of 8 percent on the interbank market in yesterday’s trading which New Glitnir, New Kaupthing and New Landsbanki were instructed to carry out.

A long term strengthening of the Icelandic currency would help bring stability to Iceland’s badly shaken economy and bring down inflation, currently running at nearly 20 percent.

Haarde told journalists that the krona had been vastly undervalued, and that the international market seems to agree.

On the separate issue of the desired pay cut for MPs and other elected officials; Haarde said he hoped a bill making such a move possible would be introduced today – meaning it could be debated in parliament as early as next week.

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