Abstract
2019 Article IV Consultation-Press Release and Staff Report
Fund Relations
(As of October 31, 2019)
Membership Status: Joined December 27, 1945
| General Resources Account: | SDR Million | Percent of Quota |
| Quota | 321.80 | 100.00 |
| Fund holdings of currency | 252.00 | 78.31 |
| Reserve tranche position | 69.80 | 21.69 |
| SDR Department: | SDR Million | Percent of Allocation |
| Net cumulative allocation | 112.18 | 100.00 |
| Holdings | 113.10 | 100.82 |
| General Resources Account: | SDR Million | Percent of Quota |
| Quota | 321.80 | 100.00 |
| Fund holdings of currency | 252.00 | 78.31 |
| Reserve tranche position | 69.80 | 21.69 |
| SDR Department: | SDR Million | Percent of Allocation |
| Net cumulative allocation | 112.18 | 100.00 |
| Holdings | 113.10 | 100.82 |
Outstanding Purchases and Loans: None
Latest Financial Arrangements:
| Approval | Expiration | Amount Approved | Amount Drawn | |
|---|---|---|---|---|
| Type | Date | Date | (SDR Million) | (SDR Million) |
| Stand-By | Nov. 19, 2008 | Aug. 31, 2011 | 1,400.00 | 1,400.00 |
| Stand-By | Mar. 22, 1962 | Mar. 21, 1963 | 1.63 | 0.00 |
| Stand-By | Feb. 16, 1961 | Dec. 31, 1961 | 1.63 | 0.00 |
| Approval | Expiration | Amount Approved | Amount Drawn | |
|---|---|---|---|---|
| Type | Date | Date | (SDR Million) | (SDR Million) |
| Stand-By | Nov. 19, 2008 | Aug. 31, 2011 | 1,400.00 | 1,400.00 |
| Stand-By | Mar. 22, 1962 | Mar. 21, 1963 | 1.63 | 0.00 |
| Stand-By | Feb. 16, 1961 | Dec. 31, 1961 | 1.63 | 0.00 |
Projected Payments to the Fund 1
(SDR million; based on existing use of resources and present holdings of SDRs):
| 2018 | 2019 | 2020 | 2021 | 2022 | |
|---|---|---|---|---|---|
| Principal | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Charges/Interest | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| 2018 | 2019 | 2020 | 2021 | 2022 | |
|---|---|---|---|---|---|
| Principal | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Charges/Interest | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Implementation of HIPC Initiative: Not applicable
Implementation of Multilateral Debt Relief Initiative (MDRI): Not applicable
Implementation of Catastrophe Containment and Relief (CCR): Not applicable
Exchange Rate Arrangement and Exchange Restrictions:
The de jure exchange rate arrangement is free floating, and the de facto exchange rate arrangement under the IMF classification system is floating. In the period from November 2018 to October 31, 2019, the Central Bank of Iceland (CBI) intervened in the foreign exchange market on 14 of the 248 working days. The CBI publishes daily data on its foreign exchange intervention with a lag.
Iceland has accepted the obligations under Article VIII, Sections 2(a), 3, and 4 and maintains no exchange restrictions subject to Fund jurisdiction under Article VIII, Section 2(a). Iceland continues to maintain certain measures that constitute exchange restrictions imposed for security reasons based on UN Security Council Resolutions.
Safeguards Assessment:
Iceland repaid all Fund credit outstanding ahead of schedule in October 2015. The CBI is no longer subject to safeguards monitoring.
Last Article IV Consultation:
Discussions for the 2018 Article IV Consultation were held in Reykjavik during September 13-25. The staff report (Country Report No. 18/318) was considered by the Executive Board on November 9, 2018. Article IV consultations with Iceland are currently held on a 12-month cycle.
Technical Assistance:
| Department | Purpose | Date |
|---|---|---|
| MCM | Capital account liberalization | March 2010 |
| MCM | Reserves building and liquidity management | June 2010 |
| MCM | Public debt management | July 2010 |
| FAD | Fiscal framework issues | August 2010 |
| MCM | Capital controls liberalization | November 2010 |
| MCM | Converging to EU regulations-credit bureaus | January 2011 |
| MCM | Liquidity management | March 2011 |
| FAD | Tax policy | March 2011 |
| STA | External Sector Statistics | April 2011 |
| FAD | Organic Budget Law | October 2011 |
| FAD | Follow up on Organic Budget Law | May 2012 |
| MCM | Capital account liberalization | March 2013 |
| FAD | IPSAS in Iceland: Towards Enhanced Fiscal Transparency | December 2013 |
| FAD | VAT reform | February 2014 |
| MCM | Capital controls liberalization | May 2014 |
| MCM | Banking supervision | February 2015 |
| MCM | Banking supervision | March 2015 |
| MCM | Stress testing | April 2015 |
| FAD | Workshop on Distributional Effects of Tax Reforms and | April 2015 |
| Expenditure Measures | ||
| MCM | Banking supervision | September 2015 |
| MCM | Banking supervision | March 2016 |
| FAD | Organic Budget Law implementation | April 2016 |
| Department | Purpose | Date |
|---|---|---|
| MCM | Capital account liberalization | March 2010 |
| MCM | Reserves building and liquidity management | June 2010 |
| MCM | Public debt management | July 2010 |
| FAD | Fiscal framework issues | August 2010 |
| MCM | Capital controls liberalization | November 2010 |
| MCM | Converging to EU regulations-credit bureaus | January 2011 |
| MCM | Liquidity management | March 2011 |
| FAD | Tax policy | March 2011 |
| STA | External Sector Statistics | April 2011 |
| FAD | Organic Budget Law | October 2011 |
| FAD | Follow up on Organic Budget Law | May 2012 |
| MCM | Capital account liberalization | March 2013 |
| FAD | IPSAS in Iceland: Towards Enhanced Fiscal Transparency | December 2013 |
| FAD | VAT reform | February 2014 |
| MCM | Capital controls liberalization | May 2014 |
| MCM | Banking supervision | February 2015 |
| MCM | Banking supervision | March 2015 |
| MCM | Stress testing | April 2015 |
| FAD | Workshop on Distributional Effects of Tax Reforms and | April 2015 |
| Expenditure Measures | ||
| MCM | Banking supervision | September 2015 |
| MCM | Banking supervision | March 2016 |
| FAD | Organic Budget Law implementation | April 2016 |
Statistical Issues
| I. Assessment of Data Adequacy for Surveillance | |
| General. Data provision to the Fund is adequate for surveillance purposes. The composition agreements reached by the bank estates in the winter of 2015-16 had large impacts on the fiscal, monetary, and external sectors. The estates’ “stability contributions” are recorded in the general government data on an accrual basis in 2016. The monetary data have been affected in both 2015 and 2016. In the external sector, the compositions entailed a large step reduction in the estates’ foreign liabilities in December 2015, and a reclassification of their remaining foreign assets and liabilities from “deposit money banks in winding up proceedings” (which no longer exists as a category) to “financial holding companies”—classified in both the balance of payments (BoP) and the international investment position (IIP) under “Other sectors—other financial corporations.” | |
National accounts. The existing methodological framework for producing national accounts data was replaced in September 2014 with the new European System of Accounts 2010 and data starting in 1997 were revised. Expenditure-based GDP data are available by component on a quarterly basis. Nonetheless, there is still scope for improvement:
|
|
| Price statistics. Data provision is adequate for surveillance. | |
| Government finance statistics. The authorities publish a treasury cash flow statement monthly, data on general government operations on an accrual basis quarterly and annually, and data on general government financial assets and liabilities annually. Iceland reports government finance statistics in accordance with the Government Finance Statistics Manual 2014 framework in the Government Finance Statistics Yearbook and is an up-to-date contributor to the International Financial Statistics. | |
| Monetary and financial statistics. The concepts and definitions conform to the guidelines of the Monetary and Financial Statistics Manual. The CBI reports detailed monetary (CBI and deposit money bank) balance sheet data promptly at a monthly frequency. | |
| Financial sector surveillance. Iceland reports quarterly financial soundness indicators to STA, with data availability starting in Q4 2015. | |
| External sector statistics. Since 2014, the CBI has compiled BoP and IIP data according to the 6th edition of the Balance of Payments and International Investment Position Manual. Data were back-cast to 1995 for both the BoP and the IIP. The BoP data do not provide a breakdown of services before 2013. | |
| II. Data Standards and Quality | |
| Subscriber to the Special Data Dissemination Standard (SDDS) since June 1996. Uses SDDS flexibility options on the periodicity and timeliness of the industrial production index. | A Report on the Observation of Standards and Codes data module was published in November 2005. |
| I. Assessment of Data Adequacy for Surveillance | |
| General. Data provision to the Fund is adequate for surveillance purposes. The composition agreements reached by the bank estates in the winter of 2015-16 had large impacts on the fiscal, monetary, and external sectors. The estates’ “stability contributions” are recorded in the general government data on an accrual basis in 2016. The monetary data have been affected in both 2015 and 2016. In the external sector, the compositions entailed a large step reduction in the estates’ foreign liabilities in December 2015, and a reclassification of their remaining foreign assets and liabilities from “deposit money banks in winding up proceedings” (which no longer exists as a category) to “financial holding companies”—classified in both the balance of payments (BoP) and the international investment position (IIP) under “Other sectors—other financial corporations.” | |
National accounts. The existing methodological framework for producing national accounts data was replaced in September 2014 with the new European System of Accounts 2010 and data starting in 1997 were revised. Expenditure-based GDP data are available by component on a quarterly basis. Nonetheless, there is still scope for improvement:
|
|
| Price statistics. Data provision is adequate for surveillance. | |
| Government finance statistics. The authorities publish a treasury cash flow statement monthly, data on general government operations on an accrual basis quarterly and annually, and data on general government financial assets and liabilities annually. Iceland reports government finance statistics in accordance with the Government Finance Statistics Manual 2014 framework in the Government Finance Statistics Yearbook and is an up-to-date contributor to the International Financial Statistics. | |
| Monetary and financial statistics. The concepts and definitions conform to the guidelines of the Monetary and Financial Statistics Manual. The CBI reports detailed monetary (CBI and deposit money bank) balance sheet data promptly at a monthly frequency. | |
| Financial sector surveillance. Iceland reports quarterly financial soundness indicators to STA, with data availability starting in Q4 2015. | |
| External sector statistics. Since 2014, the CBI has compiled BoP and IIP data according to the 6th edition of the Balance of Payments and International Investment Position Manual. Data were back-cast to 1995 for both the BoP and the IIP. The BoP data do not provide a breakdown of services before 2013. | |
| II. Data Standards and Quality | |
| Subscriber to the Special Data Dissemination Standard (SDDS) since June 1996. Uses SDDS flexibility options on the periodicity and timeliness of the industrial production index. | A Report on the Observation of Standards and Codes data module was published in November 2005. |
Iceland: Table of Common Indicators Required for Surveillance
(as of October 31, 2019)
Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
These columns should only be included for countries for which Data ROSC (or a Substantive Update) has been published.
This reflects the assessment provided in the data ROSC or the Substantive Update (published in November 2005) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).
Same as footnote 7, except referring to international standards concerning (respectively) source data, assessment of source data, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.
Iceland: Table of Common Indicators Required for Surveillance
(as of October 31, 2019)
| Date of latest observation |
Date received |
Frequency of Data7 |
Frequency of Reporting7 |
Frequency of Publication7 |
Memorandum Items:8 | ||
|---|---|---|---|---|---|---|---|
| Data Quality - Methodological Soundness9 |
Data Quality - Accuracy and Reliability10 |
||||||
| Exchange Rates | October 30, 2019 |
October 30, 2019 |
D and M | D and M | D and M | ||
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 |
Aug. 2019 | Sept. 2019 | M | M | M | ||
| Reserve/Base Money | Aug. 2019 | Sept. 2019 | M | M | M | LO, O, LO, LO | LO, O, O, O, O |
| Broad Money | Aug. 2019 | Sept. 2019 | M | M | M | ||
| Central Bank Balance Sheet | Aug. 2019 | Sept. 2019 | M | M | M | ||
| Consolidated Balance Sheet of the Banking System |
Aug. 2019 | Sept. 2019 | M | M | M | ||
| Interest Rates2 | October 30, 2019 |
October 30, 2019 |
D | D | D | ||
| Consumer Price Index | Aug. 2019 | Sept. 2019 | M | M | M | O, O, O, O | O, O, O, O, O |
| Revenue, Expenditure, Balance and Composition of Financing3 - General Government4 |
Q2, 2019 | Aug. 2019 | Q | Q | Q | O, LO, O, LO | LO, O, O, O, O |
| Revenue, Expenditure, Balance and Composition of Financing3- Central Government |
Q2, 2019 | Aug. 2019 | Q | Q | Q | ||
| Stocks of Central Government and Central Government-Guaranteed Debt5 |
Q2, 2016 | Aug. 2019 | Q | Q | Q | ||
| External Current Account Balance | Q2, 2019 | Aug. 2019 | Q | Q | Q | O, O, LO, O | LO, O, O, O, O |
| Exports and Imports of Goods and Services | Q2, 2019 | Aug. 2019 | Q | Q | Q | ||
| GDP/GNP | Q2, 2019 | Aug. 2019 | Q | Q | Q | O, LO, O, LO | LO, O, LO, LO, O |
| Gross External Debt | Q2, 2019 | Aug. 2019 | Q | Q | Q | ||
| International Investment Position6 | Q2, 2019 | Aug. 2019 | Q | Q | Q | ||
Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
These columns should only be included for countries for which Data ROSC (or a Substantive Update) has been published.
This reflects the assessment provided in the data ROSC or the Substantive Update (published in November 2005) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).
Same as footnote 7, except referring to international standards concerning (respectively) source data, assessment of source data, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.
Iceland: Table of Common Indicators Required for Surveillance
(as of October 31, 2019)
| Date of latest observation |
Date received |
Frequency of Data7 |
Frequency of Reporting7 |
Frequency of Publication7 |
Memorandum Items:8 | ||
|---|---|---|---|---|---|---|---|
| Data Quality - Methodological Soundness9 |
Data Quality - Accuracy and Reliability10 |
||||||
| Exchange Rates | October 30, 2019 |
October 30, 2019 |
D and M | D and M | D and M | ||
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 |
Aug. 2019 | Sept. 2019 | M | M | M | ||
| Reserve/Base Money | Aug. 2019 | Sept. 2019 | M | M | M | LO, O, LO, LO | LO, O, O, O, O |
| Broad Money | Aug. 2019 | Sept. 2019 | M | M | M | ||
| Central Bank Balance Sheet | Aug. 2019 | Sept. 2019 | M | M | M | ||
| Consolidated Balance Sheet of the Banking System |
Aug. 2019 | Sept. 2019 | M | M | M | ||
| Interest Rates2 | October 30, 2019 |
October 30, 2019 |
D | D | D | ||
| Consumer Price Index | Aug. 2019 | Sept. 2019 | M | M | M | O, O, O, O | O, O, O, O, O |
| Revenue, Expenditure, Balance and Composition of Financing3 - General Government4 |
Q2, 2019 | Aug. 2019 | Q | Q | Q | O, LO, O, LO | LO, O, O, O, O |
| Revenue, Expenditure, Balance and Composition of Financing3- Central Government |
Q2, 2019 | Aug. 2019 | Q | Q | Q | ||
| Stocks of Central Government and Central Government-Guaranteed Debt5 |
Q2, 2016 | Aug. 2019 | Q | Q | Q | ||
| External Current Account Balance | Q2, 2019 | Aug. 2019 | Q | Q | Q | O, O, LO, O | LO, O, O, O, O |
| Exports and Imports of Goods and Services | Q2, 2019 | Aug. 2019 | Q | Q | Q | ||
| GDP/GNP | Q2, 2019 | Aug. 2019 | Q | Q | Q | O, LO, O, LO | LO, O, LO, LO, O |
| Gross External Debt | Q2, 2019 | Aug. 2019 | Q | Q | Q | ||
| International Investment Position6 | Q2, 2019 | Aug. 2019 | Q | Q | Q | ||
Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
These columns should only be included for countries for which Data ROSC (or a Substantive Update) has been published.
This reflects the assessment provided in the data ROSC or the Substantive Update (published in November 2005) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).
Same as footnote 7, except referring to international standards concerning (respectively) source data, assessment of source data, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.
When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.