Journal Issue

Iceland: Fourth Review Under the Stand-By Arrangement, Request for Waivers of Applicability, and Request for Establishment of Performance Criteria Informational Annex

International Monetary Fund
Published Date:
January 2011
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Iceland: Fund Relations

(As of November 30, 2010)

I. Membership Status: Joined: December 27, 1945; Article VIII

II. General Resources Account:

SDR MillionPercent Quota
Fund holdings of currency868.95738.91
Reserve position in Fund18.6615.86
Holdings Exchange Rate

III. SDR Department:

SDR MillionPercent Allocation
Net cumulative allocation112.18100.00

IV. Outstanding Purchases and Loans:

SDR MillionPercent Quota
Stand-By Arrangements770.00654.76

V. Latest financial Arrangements:

TypeDate of


Amount Approved

(SDR million)
Amount Drawn

(SDR million)
Stand-ByNov 19, 2008Aug 31, 20111,400.00770.00

VI. Projected Payments to the Fund (SDR Million; based on existing use of resources and present holdings of SDRs):


VII. Implementation of HIPC Initiative: Not applicable

VIII. Safeguards Assessment: The 2009 assessment concluded that the CBI’s overall control environment was broadly appropriate for a small central bank, with good controls in the accounting and financial reporting area. The CBI’s external and internal audit procedures practices were not found to be in line with international practices, however, and the foreign reserves management area would benefit from development. The authorities have already taken steps to implement safeguard recommendations, notably by appointing an international audit firm under the auspices of the Auditor General to conduct annual external audits of the CBI in line with international standards, starting with financial year 2009. Internal audit was also outsourced. Work on other recommendations, such as the reserves management guidelines, is in progress.

IX. Last Article IV Consultation:

Discussions for the 2010 Article IV Consultation were held in Reykjavik during June 14–28, 2010 and July 19–22, 2010. The Staff Report (country report No. 10/176) was considered by the Executive Board on September 29, 2010. Article IV consultations with Iceland are currently held on a 24-month cycle.

IX. Fourth Review Mission:

Discussions were held during Nov 2–12. The mission met with Prime Minister Sigurðardóttir, Finance Minister Sigfússon, Economic Affairs Minister Árnason, Central Bank Governor Guðmundsson, and other senior officials, as well as parliamentarians, CEOs of the new banks and Icelandic corporations, the employers’ federation and labor unions, and academics. The staff team comprised J. Kozack (head), A. Chailloux and W. Maliszewski (EUR); I. Petrova (FAD); L. Cortavarria (MCM); M. Chivakul (SPR). M. Flanagan (EUR) joined the first week of the mission. The mission overlapped with a technical assistance mission by MCM. The mission was assisted by F. Rozwadowski and E. Karlsdóttir from the resident representative office. L. Alfredsdottir (OED) attended many meetings.

X. Technical Assistance:

MCMForeign exchange regulationNovember 2008
FADBudget frameworkJanuary 2009
MCMMonetary operationsFebruary 2009
MCMCapital account liberalizationFebruary 2009
LEGDebt restructuringFebruary 2009
FADBudget frameworkMay 2009
MCMCapital account liberalizationJune 2009
MCMPublic debt managementAugust 2009
MCMMonetary operationsSeptember 2009
STAMonetary and financial statisticsSeptember 2009
FADCash managementSeptember 2009
MCMPublic debt managementOctober 2009
MCMMonetary operationsDecember 2009
MCMCapital account liberalizationMarch 2010
MCMReserves build and liquidity managementJune 2010
MCMDebt managementJuly 2010
FADFiscal framework issuesAugust 2010
MCMCapital Control LiberalizationNovember 2010

XI. Resident Representative:

  • Mr. Franek Rozwadowski assumed the position in March 2009.

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