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Measures to Lift Capital Controls

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Measures to Lift Capital Controls

Press conference

From yesterday's press conference: Central Bank of Iceland Governor Már Guðmundsson, Finance Minister Bjarni Benediktsson and Prime Minister Sigurður Ingi Jóhannsson. Photo: Screenshot from RÚV.

A draft resolution introduced yesterday by Finance Minister Bjarni Benediktsson and Prime Minister Sigurður Ingi Jóhannsson includes measures which would be a big step toward the lifting of capital controls in Iceland, RÚV reports.

Once those proposals take effect, most people would no longer be affected by capital controls. Beginning in the New Year, only half a percent of the population would be subject to capital controls. That information was shared at a press meeting yesterday by Bjarni, Sigurður Ingi and Central Bank of Iceland Governor Már Guðmundsson.

At the beginning of next year, it will be evaluated whether capital controls, which have been in effect for eight years, can be lifted completely. Bjarni said the proposed changes would increase freedom for individuals and companies alike.

Rules regarding investment in real estate will be relaxed. Besides, people will no longer have to present their flight ticket to be able to purchase foreign currency for travel. Bjarni explained that only the wealthiest individuals would be subject to certain restrictions or roofs.

Már stated that conditions for lifting the controls were very favorable at the moment.

Highlights of the draft resolution include the following measures:

Icelanders’ direct investment abroad will have no limit, but requires confirmation by Central Bank of Iceland.

Investment in financial instruments, issued in a foreign currency, and the paying up foreign loans will be allowed up to a certain mark.

Individuals may purchase one piece of real estate abroad a year, regardless of price.

The requirement for Icelanders to return foreign currency will be relaxed.

Rules regarding the purchase of foreign currency for travel will be relaxed.

The Central Bank of Iceland will obtain permission to collect more information to be able to promote financial and pricing stability.

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