Iceland’s Carry Trade Trauma Shapes New Currency Regime Limits
This article is for subscribers only.
Iceland is about to exit its capital controls, but it probably will never go back to a full, free-floating currency, Finance Minister Bjarni Benediktsson says.
One of the key lessons of the 2008 financial meltdown was never again to create an environment in which offshore investors can take advantage of the island’s higher interest rates just to turn a quick profit. Anyone who wants to invest in the island needs to have a longer-term interest in its economic future, he said in an interview in Reykjavik on Wednesday.