Inspired by Iceland
Breaking: 66 billion króna agreement signed with China
Posted by Max Naylor on Wednesday, June 09, 2010
A bilateral currency swap agreement between the Central Banks of Iceland and China was signed by both parties this morning. The agreement, which is to the tune of 66 billion Icelandic króna or 3.5 billion Chinese yuan, lasts for three years and can be extended if both parties agree.

According to IcelandReview, Minister for Economic Affairs Gylfi Magnússon says that the agreement will improve Iceland’s ability to access foreign currency, which is good news for the economy as a whole. It also opens up new avenues for trade between the two countries.

The agreement will not not immediately strengthen Iceland’s foreign currency reserves, however. 

Following the agreement, an account for China will be opened at the Central Bank of Iceland and vice versa. The account is expected to be used to pay for the importation of Chinese products. Már Másson, head of the Central Bank, said that the idea of an agreement between the two countries was first formulated in autumn 2008, just before the bank collapse.

Sources: mbl.is, visir.is
Image: mbl.is

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