11 July 2014

Central Bank increases regular foreign currency purchases

The Central Bank of Iceland has decided to increase regular, weekly, foreign currency purchases in the interbank foreign exchange market from three million euros to six million euros. The purchases will take place on Tuesdays and Thursdays when the market open. 

From the start of 2014 the balance of Central Bank of Iceland market purchases in excess of sales of foreign currency have amounted to 275 million euros which equals 42.7 b.kr. This is equivalent to average purchases amounting to 9.8 million euros per week.

In the press release that was published on 11 June 2014 it was stated that the Central Bank intended to recommence regular foreign currency purchases. Since that time, the Bank has purchased three million euros from market makers every Tuesday, 12 million euros in total, which equals 1.8 b.kr. At the same time there has been a considerable inflow of foreign currency and the Central Bank has purchased foreign currency from market makers beyond regular purchases. From 11 June 2014, the Central Bank has purchased 41 million euros, the equivalent of 6.3 b.kr., in addition to regular purchases. In the past 5 weeks the Central Bank has purchased on average 10,6 million euros per week in regular purchase and interventions. In light of these recent developments and assessment of foreign exchange market conditions, the Central Bank believes that it is feasible to increase regular purchases of foreign currency from three million euros per week to six million euros.

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

No. 23/2014
11. July 2014