The International Monetary Fund on Wednesday approved a two-year, $2.1 billion support program for Iceland designed to restore confidence and stabilize the country's shattered economy.
Iceland's most pressing need is foreign currency. The island is dependent on imports, and foreign suppliers demand foreign currency for payment. Trade in Icelandic kronur is limited since few investors want to buy it and the central bank has put restrictions on currency trade to prevent a massive outflow of capital.
The IMF funding had been delayed amid disputes between Iceland and other countries over how to compensate foreign depositors with money frozen in the island's collapsed banks. An acknowledgement Sunday by Iceland that it is responsible for the first €20,000 ($25,200) of foreigners' deposits appeared to have mollified the other countries.
1 comment:
Why did it take the IMF so long to allow this? Like Duy said, the island is dependent on imports and so it needed this. This is a good thing for Iceland and the rest of the world.
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