Iceland's Jóhannesson Urges to Cut Interest Rates

Benedikt Jóhannesson, minister of finance in Iceland, have affirmed that the nation’s central bank had to slash interest rates another time in order to ease the pressure weighed on Icelandic krona  (ISK) together with the removal of capital controls.

Jóhannesson also mentioned that he does not have any “influence” regarding this decision as the government have taken these actions to lessen the pressure against the economy, as well as  to prevent overheating, to the extent of rising of budget surplus.

On one side, the administration hopes that the steps to cool down pressure on krona will be sufficient to realize more foreign investments for the pension funds. The ISK increased by 17 percent versus  the European currency on the previous year, it was able to climb higher due to burgeoning record of tourist inflow. On Monday, krona plummeted by 3 percent while bond yields rack up. The recovery of the currency was recorded on Tuesday in the capital city of Reykjavik with an increase of 0.6 percent.

The financial and legislative precautions were implemented as no one can say when will the country would experience the crisis again.