Fitch Ratings Full Rating Report
The rating agency, Fitch Ratings, has released its Full Rating Report on Iceland following an annual visit to Iceland in June. Regarding key rating drivers, the report starts with capital account liberalisation, and says: "The main driver of Fitch Ratings’ upgrade of Iceland’s Foreign Currency Long-Term IDR to ‘BBB+’ is the presentation of a detailed strategy for the liberalisation of capital controls. Fitch believes that the plan is credible and will allow for the lifting of capital controls without generating undue balance of payments pressure."
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Fitch Ratings upgrades Iceland to BBB+
Fitch Ratings has upgraded Iceland’s Long-term foreign currency Issuer Default Rating (IDR) to ‘BBB+’ from ‘BBB‘ and upgraded its Long-term local currency IDR to ‘A-’ from ‘BBB+’. The agency has also upgraded the Short-term foreign currency IDR to ‘F2’ from ‘F3’and upgraded the Country Ceiling to ‘BBB+’ from ‘BBB‘. The Outlooks on the Long-term IDRs are Stable.
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Moody's publishes annual sovereign credit analysis
The rating agency has released its annual sovereign credit analysis on Iceland following an annual visit to Iceland in June.
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Standard and Poor's upgrades Iceland's rating
Standard & Poor's Ratings Services has raised its long- and short-term foreign and local currency sovereign credit ratings on the Republic of Iceland to ‘BBB/A-2’ from 'BBB-/A-3'. The outlook is Stable. S&P states that the upgrade is based on credible government proposals towards eventual lifting of capital controls. The proposals will address the country’s sizable balance-of-payments vulnerability by relieving the latent pressure on the Icelandic krona (ISK) exchange rate.
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Authorization for pension funds to invest abroad this year
The Central Bank of Iceland intends to grant pension funds operating under licences as per Sections V or XI of Act no. 129/1997, together with other domestic providers of personal pension savings schemes, an exemption from the Foreign Exchange Act, no. 87/1992, for investments in financial instruments issued in foreign currencies. The total authorised for such investments will amount to ISK 10 billion and the investment mandate will be allocated between parties with regard to size, which will be given a weighting of 70%, and to net inflow, with a weighting of 30%. The calculation will be based on data from the latest Financial Supervisory Authority annual report on the pension funds, viz. the figures for the year 2013. The exemption to each party will expire at the end of the current calendar year.
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