I don't know for you, but it looks to me that their economy is now in much better shape than any of the ignorant economists predicted, the interest rates a lot lower than they used to, inflation is now under control, their currency has jumped 22% against the Euro, and they don't seem to have financing issues, contradicting useless Moody's rating.
Now, if only Greece, Spain, etc. could default, we would get to the end of this crisis a lot quicker, instead of this agonising that puts the whole world on the same path as Japan's.
Aug. 18 (Bloomberg) -- Iceland’s central bank cut the benchmark interest rate by a percentage point after the island’s currency, sheltered by capital controls for the past two years, continued to strengthen and inflation eased.
Sedlabanki lowered the seven-day collateral lending rate to 7 percent, the Reykjavik-based bank said on its website today. The bank also cut the deposit rate to 5.5 percent from 6.5 percent. Policy makers have reduced the benchmark 11 times from a record 18 percent since obtaining a $4.6 billion loan from a group led by the International Monetary Fund at the end of 2008.
Capital controls, imposed following the failure of Iceland’s three largest lenders in October 2008, have protected the krona from a sell-off. The currency has gained 22 percent against the euro since a Nov. 12 low, stemming consumer price gains. Inflation slowed 0.9 point to 4.8 percent last month, the lowest rate in almost three years.
“There are many things in the numbers to indicate that we’ve already reached the bottom or that it is already behind us,” central bank Governor Mar Gudmundsson told state broadcaster RUV on Aug. 9.
The Supreme Court on June 16 banned the indexation of loans to foreign exchange rates, leaving banks liable for currency losses on as much as $28 billion in debt. The move prompted Moody’s Investors Service on July 29 to warn it may lower Iceland’s credit grade to junk, should the ban delay a recovery or force the government to increase its debt burden by funding a bank rescue.
The June 16 decision threatens to erase as much as $4.3 billion from bank balance sheets, including assets held by the state-created successors to failed Kaupthing Bank hf, Glitnir Bank hf and Landsbanki Islands hf, Finance Minister Steingrimur Sigfusson said in June.
At the same time, the government has yet to resolve a dispute with the U.K. and the Netherlands on how to cover $5.2 billion in depositor claims stemming from accounts dubbed Icesave that were offered by Landsbanki before its failure.