Iceland removes last post-crash controls

Iceland’s finance ministry said yesterday that in the coming week it would lift the remaining capital controls that have been in place since the financial crisis in 2008, easing restrictions on households and businesses.

“The removal of the capital controls, which stabilised the currency and economy during the country’s unprecedented financial crash, represents the completion of Iceland’s return to international financial markets,” it said in a statement.

The changes take effect tomorrow and will affect individuals, firms, and pension funds. The government started dismantling capital controls last year by easing restrictions for residents.

Iceland’s Central Bank said in a separate statement that it had entered an agreement to purchase offshore crown assets for close to 90 billion Icelandic crowns ($836m, €783m) at an exchange rate of 137.5 crowns per euro.

Iceland has been locked in a dispute with funds that owned more than $1bn (€936m) worth of krona-denominated assets that were frozen by the Icelandic authorities.

The central bank said remaining offshore crown holders will be invited to sell their assets to the central bank at the same exchange rate over the next two weeks.

The ministry said holders that do not sell will not be able to move their assets.

The funds have waged a fight in Icelandic courts and at the European Free Trade Association’s Surveillance Authority to get a better rate than Iceland offered investors in an auction last year. (Reuters)
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