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Iceland’s Finance Minister for Lower Interest Rates

“High interest rates,” the minister explains, “contribute to the strong rate of the króna, a rate so high that the travel industry, fishing industry and, as a matter of fact, all sectors which compete with those abroad, or sell their goods or services there, are struggling.” Jóhannesson lists various ways in which the government has tried to counter the strengthening of the króna in the past 111 days: “We have lifted capital controls, paid down foreign debt, announced higher taxes on foreign tourists, encouraged pension funds to transfer funds abroad, and predicted a larger budget surplus, but almost to no avail. The interest tool has not yet been applied, and the Central Bank is in charge of that, or rather the Monetary Policy Committee. It’s up to the committee to make the next move.” (Iceland Review Online)

 

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