Icelandic krona appears to be doing well

The real exchange rate of the Icelandic krona continues to increase and has strengthened for the seventh month in a row. The exchange rate index now stands at 75 points and has strengthened by 10 percent this year so far.

However, Thorvaldur Gylfason, professor of economics, says that the figures paint an inaccurate picture, according to RUV. He says the strengthening is entirely down to Iceland’s continued currency exchange restrictions and is not a real strengthening of the currency at all.

He adds that although inconvenient, the currency controls will probably have to remain in place for a long time to come. If the restrictions were lifted tomorrow, the krona would sink like a stone, Gylfason says.

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