IMF approves Iceland to receive funds
By Harry Dunphy |
April 19, 2010, Monday
|
Print Edition
Print Edition
THE International Monetary Fund has cleared the way for Iceland to receive US$160 million to aid its struggling economy, the second installment of US$2.1 billion in bailout funds from the organization.
The move by the IMF executive board came last Friday after Iceland's Prime Minister Johanna Sigurdardottir pressed the IMF last month to complete a delayed review of the country's economic performance.
After the IMF executive board acted, the head of the body Dominique Strauss-Kahn said he was confident the policies and financing now in place will help Iceland's economy stage a recovery in the second half of 2010.
He said the economic crisis that struck in 2008 "has taken a heavy toll on Iceland and its citizens, but I am confident that the policies and financing now in place will ease the burden of adjustment."
He said the IMF was ready to support Iceland in any way it can.
In Reykjavik, Iceland's Minister of Economic Affairs Gylfi Magnusson said in a statement that access to the new money will shore up Iceland's foreign currency reserves. He said it "shows the trust that the IMF board and the nations helping Iceland have in the results we have achieved, and the ability of Iceland to reach its goals."
Iceland was an early victim of the credit crunch, which sent its debt-fueled economy into free fall. The value of Iceland's currency collapsed, growth dropped dramatically and unemployment shot up.
The latest IMF loan installment had been held up by a dispute involving Iceland repaying debts to Britain and the Netherlands although the IMF insisted this was not the case.
Iceland has not resolved a dispute with these two nations over the repayment of US$5.3 billion to pay off debts spawned by the failure of Icesave, an Icelandic Internet bank that collapsed during the financial crisis.
The move by the IMF executive board came last Friday after Iceland's Prime Minister Johanna Sigurdardottir pressed the IMF last month to complete a delayed review of the country's economic performance.
After the IMF executive board acted, the head of the body Dominique Strauss-Kahn said he was confident the policies and financing now in place will help Iceland's economy stage a recovery in the second half of 2010.
He said the economic crisis that struck in 2008 "has taken a heavy toll on Iceland and its citizens, but I am confident that the policies and financing now in place will ease the burden of adjustment."
He said the IMF was ready to support Iceland in any way it can.
In Reykjavik, Iceland's Minister of Economic Affairs Gylfi Magnusson said in a statement that access to the new money will shore up Iceland's foreign currency reserves. He said it "shows the trust that the IMF board and the nations helping Iceland have in the results we have achieved, and the ability of Iceland to reach its goals."
Iceland was an early victim of the credit crunch, which sent its debt-fueled economy into free fall. The value of Iceland's currency collapsed, growth dropped dramatically and unemployment shot up.
The latest IMF loan installment had been held up by a dispute involving Iceland repaying debts to Britain and the Netherlands although the IMF insisted this was not the case.
Iceland has not resolved a dispute with these two nations over the repayment of US$5.3 billion to pay off debts spawned by the failure of Icesave, an Icelandic Internet bank that collapsed during the financial crisis.
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