News Brief: IMF Welcomes Flotation of Iceland's Króna

March 28, 2001

IMF Deputy Managing Director Eduardo Aninat said today:

"The IMF welcomes the Icelandic government's announcement on March 27, 2001, to allow the exchange rate of the króna to float, accompanied by adoption of an inflation targeting framework as an anchor for monetary policy. As an IMF mission noted in January this year, this regime is a natural extension of the widening of the fluctuation bands over the past decade, and will serve Iceland better in view of its integration in international capital markets. The adoption of inflation targeting sets price stability as the main objective of monetary policy and will help promote long-term financial stability."


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