Posted by Unknown on Tuesday, June 01, 2010
On 31 May, the Central Bank of Iceland (officially Seðlabankinn) announced a transaction that bolstered its foreign currency reserves by a whopping 17%. The 26 public pension funds of Iceland were invited to a closed auction of Housing Finance Fund (HFF or Íbúðalánasjóðurinn) bonds, where they were sold for a total of €549m. The pension funds will sell off foreign assets to finance the foreign-denominated transaction.
The auction follows the Central Bank's purchase of Avens B.V., a bank in Luxembourg owned by Landsbanki Íslands, which held the bonds previously. The sale of the bonds is significant in helping to finance the purchase of the bank, for which the Central Bank issued Euro-denominated bonds.
According to Iceland's Central Bank Governor Már Guðmundsson, this has been an important step in removing capital controls, which were put in place during the banking crisis to stabilise the króna.
Post a Comment
Subscribe to Post Comments [Atom]