Deliver Your News to the World

H.F. Securities CEO interviewed by Bloomberg

Andri Gudmundsson, CEO of the Icelandic securities firm H.F. Securities, recently spoke with Bloomberg about how investors in Iceland are being affected by the capital controls imposed in 2008 by Sedlabanki Islands.


WEBWIRE

Andri Gudmundsson, CEO of the Icelandic securities firm H.F. Securities, recently spoke with Bloomberg about how investors in Iceland are being affected by the capital controls imposed in 2008 by Sedlabanki Islands (The Central Bank of Iceland), and the steps that are being taken to move forward.
 
Today, investors with about USD 3 billion backed up in ISK assets now face delays in exiting their holdings as steps to ease the restrictions by 2015 show signs of faltering.
 
In an interview with Bloomberg, Gudmundsson explained that it will take decades for the Central Bank to remove the capital controls with its current method, and eventually the bank will have to change tactics. He also explained how the currency restrictions remain a key impediment to boosting Iceland’s credit grade.
 
At the recent currency auctions, the Central Bank purchased ISK 4.9 billion (USD 39 million), less than a fifth of its target. The bank also bought EUR 22.5 million (USD 30 million) of a planned EUR 100 million in a separate auction designed to encourage long-term investment – the so-called Investment Programme.
 
According to the Investment Programme, parties intending to invest in Iceland and that sell foreign currency at a domestic financial institution are permitted to participate in the Central Bank’s foreign exchange auctions. Here they can sell the Central Bank the same amount of foreign currency that they have sold to the financial institution concerned, provided that all of the funds will be used for domestic investment, according to further provisions.
 
In the auction last week, investors participating in the Investment Programme received a considerable discount on their investment by commiting for 5 years.
 
The central bank last week accepted a minimum price of ISK 235 per euro in its purchase auction, or 40 percent below the current onshore rate of about 168.
 
“Ideally, the central bank wants the krona offshore rate to converge with the krona onshore rate,” said Gudmundsson. “When you look at the developments over the past year, there are signs that the reverse is happening.”
 
For more information about the current financial climate in Iceland, visit www.hfverdbref.is/en.



WebWireID155427




 
 Andri Gudmundsson
 Investment Programme
 H.F. Securities
 Securities Firm
 Iceland Finance


This news content may be integrated into any legitimate news gathering and publishing effort. Linking is permitted.

News Release Distribution and Press Release Distribution Services Provided by WebWire.