Monetary Policy Committee report to Parliament
The Monetary Policy Committee report to Parliament on the Committee's work during the latter half of 2016 has been published on the Central Bank’s website. The Act on the Central Bank of Iceland stipulates that the Monetary Policy Committee (MPC) of the Central Bank of Iceland submit to Parliament a report on its activities twice a year and that the contents of the report be discussed in the Parliamentary committee of the Speaker’s choosing.
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Fitch revises outlook on Iceland to positive
Fitch Ratings has revised the outlook on Iceland’s long-term foreign and local currency IDRs to positive from stable. The IDRs are affirmed at BBB+. The issue ratings on Iceland’s senior unsecured foreign- and local-currency bonds were also affirmed at BBB+.
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S&P raises Iceland‘s long-term ratings to A- on stronger external position
The rating agency S&P Global Ratings raised its long-term foreign and local currency sovereign credit ratings on Iceland to A- from BBB+. At the same time, the A-2 short-term ratings were confirmed. The outlook is stable.
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Offshore króna assets as of end-2016
At the end of 2016, the stock of offshore króna assets amounted to 191 b.kr., after declining by just over 128 b.kr. since 31 March 2016. At the year-end, the offshore stock consisted largely of Treasury bonds, Treasury bills, and other Government-guaranteed securities (105.6 b.kr.); cash and Central Bank certificates of deposits (72.7 b.kr.); and other types of assets (12.8 b.kr).
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Foreign exchange market, exchange rate developments, and foreign exchange reserves 2016
Foreign currency inflows were strong in 2016, foreign exchange market turnover grew, and the Central Bank's foreign exchange reserves increased significantly. Turnover in the interbank foreign exchange market increased by 42% year-on-year, and the Bank’s share was 55%. The Bank bought foreign currency from market makers in the amount of 386 b.kr. during the year, thereby mitigating the appreciation of the króna. In spite of the Bank’s purchases, the króna appreciated by 18.4% during the year. The foreign exchange reserves increased by 163 b.kr., primarily because of net foreign currency purchases by the Central Bank, and amounted to 815 b.kr. at the year-end.
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