Chinese investor Huang Nubo has abandoned all intentions of investing in Iceland. The news comes in reaction to the Minister of the Interior’s response to a land purchase in Grímsstaðir á Fjöllum in northeast Iceland.

Labels: Economy, Foreign affairs

A typical Lindex store

Swedish fast-fashion label and rival to H&M, Lindex, enjoyed the company’s biggest ever opening in its history when it opened the doors to its newest branch, and first in Iceland, in the Kópavogur-based shopping centre Smáralind. The store was forced to close its doors shortly after opening because its stock was completely sold out.

The company revealed in a press release that the store’s reception in Iceland was much better than expected, and marked the biggest opening in the 60-year history of the chain. The store sold three week’s worth of stock in as many days, and most lines have sold out completely. Approximately 10,000 people attended the store’s grand opening, at an average rate of about five people a minute.

Lindex has thanked all of those who came to the store over these three days, and says that real-time sales were five times greater than expected. The company is desperately trying to get hold of more stock but has warned that it might not suffice for the thousands of customers who are visiting the store each day. The store will therefore be closed for the rest of the week and reopen on Saturday 19th November.

Source: mbl.is
Image: Lindex

Labels: Economy, Fashion, Retail

Martin Wolf in China, 2007

Martin Wolf, associate editor of British newspaper the Financial Times, says he thinks there’s nothing wrong with the fact that Icelanders are holding onto the Icelandic króna, the “smallest currency in the world”, and thinks that the króna has served Icelanders well. As of the time of writing, there are 182 krónur to the pound sterling, 158 to the euro and 114 to the US dollar.

Wolf presided over a meeting this evening with VÍB, the asset management arm of Íslandsbanki. He says he doesn’t see an advantage for Iceland in joining the EU, where he believes the country would have no influence and would have to relinquish control of important resources.

Addressing the audience he said, “I have to ask those of you who want this, have you not been following what is currently going on in the Union?”, which was received with a cry of laughter.

He went on to say that people shouldn’t forget that if they adopt another currency then they need to come to terms with the fact that the exchange rate will not always move in their favour, and that [Icelandic] society would have to possess enormous flexibility.

Amongst the others who were in attendance at the meeting were Vilhjálmur Egilsson, the CEO of Samtaka atvinnulífsins, Katrín Ólafsdóttir, a lecturer at the University of Reykjavík and Heiðar Már Guðjónsson, an investor.

Source: Morgunblaðið
Image: Wikipedia

Labels: Banking, Economy, UK

It wouldn’t be possible for Iceland to adopt the euro as its currency until some time after 2014 at the earliest, according to Gylfi Magnússon, the economy and business secretary.

Gylfi’s statement was made today in reply to an inquiry made by Unnur Brá Konráðsdóttir, a PM for the Independence Party, about a possible timetable for Iceland’s fulfilment of the Maastricht Treaty conditions for countries wishing to adopt the euro.

Gylfi anticipates an adjustment in the interest rate to be closer to that of the Eurozone in the lead-up to Iceland’s adoption of the currency. History shows that the same has happened in other countries before their take-up of the Euro.

Source: mbl.is
Image: 55Laney69

Labels: Economy, Euro

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.

Labels: China, Economy

The Consumer Association of Iceland (Neytendasamtökin) has said today that it is unacceptable that importers and retailers have taken advantage of the strengthening króna to increase the prices of their products. The organisation says that it should be a matter of course to pass on the benefits of a stronger króna onto consumers, rather than using it as an opportunity to increase their profit margins.

The organisation states it is obvious that the price of imported products has not fluctuated as a direct result of variances in the exchange rate of the króna. In recent months, the króna has been strengthening against other European currencies, and consumers have felt the pinch as the majority of products imported to Iceland come from other European countries.

The has euro depreciated 15.5% against the króna since 12th September last year, alongside the Danish krona (which is pegged to the euro). Other European currencies also saw a depreciation against the króna, although not as great.

Source: mbl.is
Image: rvk.is

Labels: Economy

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.

Labels: Banking, Economy, Kreppa

The price of vegetables, both domestically grown and imported, has increased by 64% over the past three years, according to an evaluation conducted by Statistics Iceland. According to data from the consumer price index, the price of alcohol and tobacco products has increased by 55% since May 2007. Petrol prices rose a staggering 76% over the same period.

Farm produce excluding vegetables has seen a comparatively low price hike of 27% over three years. Other domestic food and drink products increased in price by 46%, and imported by 75%. Imported fruit and veg has always been more expensive in Iceland in comparison with other European countries, and these price increases only widen the gap between Iceland and other nations on food prices.

Inflation over a twelve month period measured 7.5% in May 2010, but stood at just 4.7% in May 2007. This follows instability of the króna since the bank collapse in autumn 2008, which included currency restrictions which have yet to be lifted.

Source: mbl.is
Image: muffet

Labels: Economy, Food, Kreppa

The concisely-named Organisation for Economic Co-operation and Development, or OECD, says in a new report that all the Nordic countries are now in a period of economic recovery. The organisation states that Iceland has achieved impressive results in its efforts to tackle the consequences of the bank collapse in the autumn of 2008. According to its report, economic growth is set to start again in the later part of this year, and should clock in at about 2.3% next year. Conversely, the rate of recession this year is expected to be around 2.2%.

Labels: Economy, Kreppa