18.12.2012

Results of foreign currency auctions

On 20 November 2012, the Central Bank of Iceland offered to purchase euros in exchange for Icelandic krónur for long-term investment in the Icelandic economy, or in exchange for payment in Treasury bond series RIKS 33 0321. The Bank also advertised for bids on the sale of Icelandic krónur for cash payment in foreign currency. The two euro purchase auctions took place between 9:45 hrs. and 10:45 hrs. today., and the króna purchase auction took place between 13:00 hrs. and 14:00 hrs. The auctions were an element in the removal of restrictions on movement of capital as set forth in the Central Bank’s capital account liberalisation strategy, published on 25 March 2011. Further information can be found in the Central Bank of Iceland Terms of foreign exchange transactions according to the Investment Programme for capital account liberalisation, with subsequent amendments, dated 18 November 2011.

Results of EUR purchase auction
In all, 86 bids totalling 43.9 million euros were submitted, and bids in the amount of 30.9 million euros were accepted. The auction was structured with a single-price format, so that all accepted offers were made available to primary dealers at the same price, which was set at 233 kr. per euro.

Highlights

Total

Treasury bonds

Investment Programme

Number of bids

86

15

71

Total amount in EUR

43.9 

4.8 m

39.1 m

Accepted bids in EUR

30.9 m

4.5 m

26.4 m



Investors selling foreign currency according to the Treasury bond option will receive indexed RIKS 33 0321 bonds as payment. Bonds sold in the series totalled 986 m.kr. nominal value. As payment for foreign currency sold, investors participating in the Investment Programme will receive Icelandic krónur for long-term investment in the Icelandic economy. Euros purchased in the two auctions totalled the equivalent of 7.2 b.kr.

Results of ISK purchase auction

 

The auction was structured with a single-price format, so that all accepted offers were made available to primary dealers at the same price, which was set at 233 kr. per euro. In all, 40 bids were submitted in the amount of 19.9 b.kr., and bids totalling 6.8 b.kr. were accepted.

Highlights

Total

Number of bids

40

Total amount in b.kr.

19.9

Accepted bids in b.kr.

6.8


Summarised results of Treasury bond and Investment Programme auctions

 

The following table shows the summarised results of the sixteen foreign currency auctions held so far this year.

Highlights

Total

Treasury bonds

Investment Programme

Number of bids

548

204

344

Total amount in EUR

497.1 m

279.9 m

217.2 m

Accepted bids in EUR

315.4 m

124.7 m

190.7 m



Treasury bond purchasers were predominantly pension funds (81%) and other investors (19%). Underlying investments in connection with the Investment Programme are as follows: equity securities, 48%, bonds, 38%, real estate, 13% and mutual funds, 1%. Combined investments under the Investment Programme amount to EUR 381 million, the equivalent of ISK 76 billion. The investments therefore amount to 4.7% of year-2011 GDP.

The next foreign currency auctions will be conducted on 5 February, 19 March and 30 April 2013.

Further information can be obtained from Már Guðmundsson, Governor of the Central Bank of Iceland, at tel: +354 569-9600.


No. 45/2012
18 December 2012

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