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IPFS News Link • Central Banks/Banking

Iceland to end capital controls more than 8 years after banking crash

• RT

Iceland was the country worst affected by the financial crash, forcing the government to take drastic measures. Reykjavik broke off negotiations on EU membership, nationalized three major banks and defaulted on $85 billion in loans. The government banned the movement of capital abroad and devalued the national currency. As a result, the stock market plummeted 90 percent, unemployment jumped to 10 percent, and inflation ballooned to 18 percent.

Afterward, Reykjavik got financial aid of $2.1 billion from the IMF, as well as a loan of $2.5 billion from other Nordic countries to jumpstart the recovery.

The changes, which are to take effect on Tuesday, will affect individuals, companies and pension funds.

"Iceland's careful, measured approach to lifting capital controls was developed and approved with domestic and international support," said Finance Minister Benedikt Johannesson.


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