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The central bank increases the surveillance of the currency restrictions  E-mail
Friday, 29 May 2009 05:52
The currency restrictions supervision, a new department of the central bank, starts operating after the weekend in order to increase the surveillance of the currency restrictions according to the sources of Morgunbladid.

Ingibjorg Gudbjartsdottir lawyer will lead this work group of three. She worked for Straumur investment bank before she took this position.

The currency restriction supervision will watch the króna assets of foreign parties and return duty of the domestic parties. It should be kept in mind that the currency exchange operations have to be authorized by the FSA.

Such surveillance is not new for the central bank. It has had surveillance on these matters and sent a few cases to the FSA which is still working on those cases. Morgunbladid did not get the information of how many cases have been sent from the central bank.

The currency restrictions were set in November following the collapse of the banks last fall to prevent excessive flow of of foreign currency in order to strengthen the króna, but the exchange rate of the króna collapsed when the banks collapsed. The restrictions were increased in April because of the weakened rate of the króna, despite the restrictions.

Considerable difference has been on the exchange rate of the króna here in Iceland and abroad. The difference has reduced. It is so possible to make profit of the difference. According to the information of Reuters is the Euro at 210 króna but 178 according to the central bank.

Around the restrictions
Trades with the króna have taken place abroad which the central bank of Iceland can not watch. It is not known of what magnitude the trades are. If these trades are not made by domestic parties that are under the return duty has it been said that this might be normal.
Former bank employees here in Iceland have seen an opportunity of pairing up persons that want to sell króna and get currency in stead, for instance euro. These may have been foreign individuals that have wanted to get rid of their króna and Icelanders that own foreign currency and need króna. Then it is better to buy cheap kóna abroad than exchange them here in Iceland.

 


News Article by Helgi Vifill Juliusson
Translated by Anya
Original Article in Icelandic
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