Central Bank increases regular purchases of foreign currency

The Central Bank of Iceland has decided to increase its regular purchase of foreign exchange from market makers on the interbank market, for an undetermined period commencing 31 July 2012. Each Tuesday since September 2010, the Bank has purchased EUR 0.5 million from each market maker on the interbank market. Each week, starting tomorrow, the bank will buy EUR 1 million from each market maker. Growing inflows and the appreciation of the króna have created room for manoeuvre to increase the purchases somewhat. The Bank's policy is that its currency purchases should be broadly sufficient to cover the interest payments on Government debt and increase the share of non-borrowed reserves in the medium term.