The Icelandic króna appreciated against the currencies of our main trading partners in February. The Central Bank intervened four times during the month, buying euros three times and selling euros once.
At the end of February, the euro stood at ISK 141.8, compared to ISK 143.2 at the end of January and the US dollar at ISK 126.6, compared with ISK 128.4 at the end of January. The trade-weighted index decreased (the króna appreciated) by 1.0% in February.
The króna remained mostly between ISK 141 and 144 per EUR during the month. It started the month at just under ISK 144 króna per EUR, then appreciated in the first half of the month, falling to a low of 140.8 ISK per EUR, before depreciating slightly towards the end of the month.
Turnover in the interbank market for foreign exchange was ISK 45.2bn (EUR 318m) in February and increased somewhat between months. The CBI's share of the month's turnover was ISK 9.2b (EUR 64m), 20% of total turnover.
The Central Bank intervened four times in February. In the first half of the month, it intervened three days and bought euros for a total of ISK 8bn (EUR 56m). On 24 February, it then sold euros for ISK 1.1bn (EUR 8m). The CBI's net purchases of foreign currency in the month were ISK 6.8bn (EUR 48m).
We do not expect an increase in outflows in the coming months. The interest rate differential with the euro should also support the króna and the currency is as a result more likely to strengthen than weaken in the coming months.