Relaxation of Iceland capital controls to begin

gylfi-magnussonIceland’s Minister for Economic Affairs, Gylfi Magnuson says that restrictions on capital inflow to Iceland will be lifted next week. The move is an important precursor to lifting restrictions on capital outflow as well, he said.

The removal of capital controls has been stalled by the delay to loan payments from the IMF and Nordic countries; but with the deal now approved, the process is able to begin.

The removal of capital inflow controls will happen immediately, but the gradual removal of outflow curbs is dependent on central bank currency reserves, external economic conditions and the extent of new capital inflows, Magnusson told Reuters.

Capital controls were imposed following the collapse of Iceland’s banking sector last autumn and since then have been in place to limit the further devaluation of the Icelandic krona.

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