The EUR cost 136 ISK at the beginning of the year. The ISK began depreciating in the wake of the Covid-19 pandemic. This is in line with the experience of other countries, as smaller currencies generally depreciated against larger ones as a result of the pandemic.
Notwithstanding short appreciation spikes in March (following an agreement between the CBI and pension funds to hold FX purchases), May (following loosening of Covid-19 related restrictions), and in September (following the CBI’s announcement that it would begin a programme of regular FX sales), the ISK was under near constant pressure until the end of October, when the EUR stood at ISK 165. The ISK appreciated somewhat in November. At year-end, the EUR cost ISK 156, a 14.9% increase from the beginning of the year.
