The last month or so, the euro has stayed close to ISK 125. While the price of a euro has exceeded ISK 125 a few times (peaked at ISK 126.5 on 21 June), it has always fallen back below ISK 125. After rather little turnover on the interbank market for foreign exchange during the first 5 months of the year, turnover increased significantly in June.
The CPI based on prices in mid-June rose 0.62% MoM, well above expectations. The CBI released the minutes of the last meeting of the MPC.
After floating between 121-125 for most of this year, the EUR/ISK rate rose temporarily above 125 a week ago. At closing yesterday a EUR cost ISK 124.9. FX market turnover in May was only ISK 7.4 billion, compared to ISK 30.3 billion in the same month last year. Turnover during the first 5 months of this year has fallen by 80% YoY.
The MPC held policy rates unchanged. Arion Bank’s IPO ended this week. Statistics Iceland published Iceland in figures 2018.
The Icelandic economy grew by 6.6% YoY in Q1 2018. The current account surplus was ISK 0.3 bn in Q1 2018. The real exchange rate depreciated by 1.6% MoM in May. S&P and Fitch both affirms Iceland’s credit rating.
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The contents published here were produced by employees of Landsbankinn Economic Research and are based on information available to the public when the analysis was compiled. Assessment of this information reflects the views of Economic Research’s employees on the analysis date, which may change without notice. | Full disclaimer
