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Króna Drops Further, Central Bank Intervenes Again

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Króna Drops Further, Central Bank Intervenes Again

Icelandic money krónur

Photo: Golli.

The Central Bank of Iceland intervened in the exchange market yesterday to prevent further devaluation of the króna, RÚV reports. This is the second such intervention in two months, the first taking place on September 11. Before that date the bank had not made such a move for over a year.

The króna has fallen nearly 13% since reaching a record high at the end of July. Már Wolfgang Mixa, assistant professor of finance at the University of Iceland, stated the drop is nothing to worry about, and that considered in historical context, the króna is still strong, though it may drop 10-15% overall.

Jón Bjarki Bentsson, chief economist at Íslandsbanki bank, says uncertainty in the tourism industry and the future of Icelandic airline WOW Air are the main reasons behind the currency’s devaluation.

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