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All Eyes on Markets Today

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All Eyes on Markets Today

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Photo: Geir Ólafsson.

Today is Iceland’s first day without capital controls since they were imposed in November of 2008, following the banking collapse. All eyes are now on the markets and their reaction to the new rules which took effect at midnight, lifting capital controls off Icelandic companies, pension funds and households.

Following the announcement Sunday that capital controls would be lifted, the markets responded positively yesterday with higher share prices of some Icelandic companies, mbl.is reports. The value of the Icelandic króna fell by about 2.7 percent yesterday against the US dollar and the Euro.

With the step taken today, captial controls have mostly been lifted off the outflow of capital from Iceland, but limits remain on the flow of capital into the country.

Yesterday, Ásgeir Jónsson, head of the Faculty of Economics at the University of Iceland, predicted, “I’d be surprised if the króna weakened [Tuesday].”

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