10 September 2012

Iceland’s currency and exchange rate policy options

The Central Bank of Iceland’s Special Report no. 7, Iceland’s Currency and Exchange Rate Options will be published on Monday 17 September 2012.

The Report contains an in-depth discussion of various currency and exchange rate options and the economic factors that must be considered in an assessment of the optimum arrangement for Iceland. Although the primary emphasis is on examining the pros and cons of abandoning the króna and adopting the euro through membership in the Economic and Monetary Union (EMU) of the European Union, the Report also covers the advantages and disadvantages of other currency areas, adoption of another currency, and other types of exchange rate pegs. The Report also reviews Iceland’s experience of its current monetary and exchange rate regime and compares it with the experience of euro area countries, both after joining the EMU and before and after the financial crisis. Finally, the Report examines the institutional structure of the euro area and the institutional elements that must be changed in Iceland if it joins the EMU.

The Report is just over 600 pages long and contains 25 chapters. It will be available on the Central Bank of Iceland website, www.sedlabanki.is, after publication. An English translation of selected material will shortly be available on the website.

A press conference concerning the publication of the Report will be held in the Sölvhóll conference room of the Central Bank of Iceland on Monday 17 September at 16:00 hrs. (NB! not 15:00, but 16:00)